AgdaPkt 2016-06-13 Interview and Joint SA PFA

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7.A. - Page 11 Redwood CityI California Founded 1U1 Notice of Public Hearing on Proposed Water & Sewer Rate Increases City Council Chambers 1017 Middlefield Road Redwood City,California Monday,June 13, 2016 at 7:00 p.m. At the date,time and location shown above,the City Council of the City of Redwood City will hold a public hearing on proposed increases to the City's water and sewer rates. If approved, these increases will be phased in over the next three years. The purpose of this notice is to describe the proposed rate increases and notify you of the public hearing. The proposed rates are designed to fund the operating and capital needs of the City's water and sewer utilities and equitably recover costs from all customers. With the proposed rates, the City's combined water and sewer rates are projected to remain in the middle range compared to other regional agencies. Water and sewer rates are used only to pay for water and sewer expenses and cannot be used for any other purpose. PROPOSED WATER RATES Redwood City charges rates to its water customers to fund the cost of providing safe and reliable water service. Redwood City is proposing to phase in a series of water rate increases over the next three years as shown on the following page. The proposed increases over the next three years equate to an overall, average annual water rate increase of approximately 6.8%per year. Impacts to water bills will vary based on customer class and volume of metered water use. Water rate increases are proposed to eliminate annual budget deficits and pay for: ➢ Wholesale Water Rates Increases — The City purchases 100% of its potable water supply from the San Francisco Public Utilities Commission (SFPUC). The SFPUC is in the process of completing a $4.8 billion program of infrastructure upgrades and reliability enhancements to its regional water system. SFPUC has doubled its wholesale water rates over the past five years and is projected to raise rates by an additional 42% over the next five years. ➢ Replacement of Aging Water Distribution System Pipelines—The City maintains over 260 miles of water system pipelines, many which are over 50 years old and are approaching the end of their useful lives. Rate increases will help provide funding for high-priority pipeline replacements and other capital improvements needed to support the continued provision of safe and reliable water service. Each customer's water charge includes two components: 1) a flat rate based on the type of customer and the customer's meter size, and 2) a consumption charge based on metered water use. Most residential customers are billed on a bimonthly basis with each bill reflecting two months of basic service charges and two months of metered water use billed according to the bimonthly tiers shown on the following page. Most non-residential customers are billed on a monthly basis. 1