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7.A. - Page 31 <br /> 1.6 Rate Increase Pass Through Provisions <br /> California Government Code Section 53756 (established via AB-3030) became effective on <br /> January 1, 2009. As subsequently amended, this section of the Code authorizes public agencies <br /> providing water, sewer, and garbage services to adopt automatic pass through rate adjustments to <br /> account for a) cost inflation, and b) increases in wholesale water charges or wastewater treatment <br /> charges. <br /> According to the Code, pass throughs must be adopted via the Proposition 218 process and can be <br /> effective for up to five years without additional Proposition 218 authorization. The Proposition 218 <br /> Notice informing ratepayers of the proposed pass through(s) must include a clearly defined formula <br /> indicating how any inflationary or wholesale adjustments will be implemented. Once adopted, <br /> agencies must send ratepayers an informational notice informing them of the pass-through not less <br /> than 30 days before the effective date of the pass-through adjustment. <br /> BWA recommends that the City adopt a rate schedule that allows for automatic pass throughs to <br /> enable the City to increase its water rates in response to unanticipated SFPUC wholesale water rate <br /> increases in excess of current SFPUC wholesale rate projections <br /> B Background, Objectives& Legal Requirements 4 <br /> ' Water&Sewer Financial Plans&Rate Studies <br />