AgdaPkt 2016-06-13 Interview and Joint SA PFA

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a`7.A. - Page 13 rented by increasing the City's Water Quantity Charges by the exact amount of the increase in cents per hcf in excess of the assumed SFPUC wholesale rates. The City will send notification of any wholesale water rate pass throughs at least 30 days prior to the effective date of any automatic pass through. PROPOSED SEWER RATES The City is proposing to phase in a series of sewer rate increases over the next three years as shown on the table below. The proposed three-year increase equates to an overall, average annual sewer rate increase of 3.0% per year. Redwood City charges rates to its sewer(wastewater) customers to fund the cost of providing safe and reliable sewer service. Redwood City owns and operates a wastewater collection system with roughly 200 miles of sewer pipelines and 31 pump stations. Wastewater is conveyed to a regional wastewater treatment plant operated by Silicon Valley Clean Water (SVCW) for treatment and effluent disposal. Sewer rate increases are proposed to pay for increased costs including: ➢ Rehabilitation&Reconstruction of Regional Wastewater Treatment Facilities-SVCW is in the process of completing a$790 million capital improvement program to rebuild and rehabilitate its regional wastewater treatment plant and approximately 8 miles of wastewater transmission pipelines, which are reaching the end of their operating lives. Redwood City is responsible for financing about 48.6%of total project costs; annual debt service payments are projected to increase substantially in upcoming years. The improvements will help SVCW meet stringent environmental regulations and provide reliable service in future years. ➢ Replacement of Aging Sewer Collection System Pipelines - Many of the City's sewer pipelines 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 sewer service. Impacts to sewer bills will vary based on customer class while impacts to commercial sewer bills will also vary based on volume of metered water use. Residential customers are billed a fixed monthly charge for sewer service. Commercial customers will pay sewer usage charges billed based on customer class and metered water use, subject to a minimum monthly charge. Current & Proposed Sewer Rates Current Proposed Rates Effective on and After Sewer August 1 July 1 July 1 Rates 2016 2017 2018 RESIDENTIAL SEWER RATES Fixed Monthly Sewer Service Charge per Dwelling Unit Residential(with 1-9 Dwelling Units) $74.95 $75.11 $76.68 $78.24 Multi-Family(with 10+Dwelling Units) 74.95 67.60 69.01 70.42 COMMERCIAL/NON-RESIDENTIAL SEWER RATES' Sewer Usage Charges:Rate per hundred cubic feet of metered water use Class A-Standard Strength, Low Flow $4.91 $5.75 $5.87 $5.99 Class B- Low Strength 5.52 6.69 6.83 6.97 Class C-Standard Strength 6.15 7.08 7.23 7.37 Class D- Mod-High Strength n/a 11.27 11.51 11.74 Class E- High Strength 14.93 16.95 17.31 17.66 Minimum Monthly Charge2 $74.95 $67.60 $69.01 $70.42 1 Class A includes Industrial accounts. Class B includes Institutional/Public accounts. Class C includes Retail/Commercial accounts and Hospitals. Class E includes Restaurants and Supermarkets. Class D is a new sewer customer class for accounts with moderate-high wastewater strength,such as a result of a mixture of Class E uses and other uses on a single account. 2 Commercial customers currently pay a fixed monthly charge of$74.95 for the first 10 hundred cubic feet of billed usage. Under the proposed rates, commercial accounts will be billed Sewer Usage Charges for all metered use, subject to the Minimum Monthly Charge. 3