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operated by SVCW. SVCW is in the process of completing a $790 million capital <br />improvement program to rebuild and rehabilitate its wastewater treatment plant <br />and wastewater transmission pipelines. Redwood City is responsible for <br />financing about 48.6% of total project costs, based on the City’s proportion of <br />flow. <br /> <br />· Replacement of Aging Sewer Collection System Pipelines – Many of the City’s <br />sewer pipelines are over 50 years old and are approaching the end of their useful <br />lives. Rate increases will help provide funding for high-priority pipeline <br />replacements and other capital improvements needed to support the continued <br />provision of safe and reliable sewer service. <br /> <br />Proactive sewer rate increases in past years have placed the sewer utility in a strong <br />position to fund a large portion of these programs, allowing for minor inflationary <br />adjustments to the sewer rate this period. Impacts to sewer bills will vary based on <br />customer class. Residential customers are billed a fixed monthly charge for sewer <br />service. Commercial customers will pay sewer usage charges billed based on customer <br />class and metered water use, subject to a minimum monthly charge. <br /> <br />Current & Proposed Sewer Rates <br />Current Sewer Rates <br />Proposed Rates Effective on and <br />after <br />August 1 <br />2016 <br />July 1 <br />2017 <br />July 1 <br />2018 <br />Residential Sewer Rates <br />Fixed Monthly Sewer Service Charge per Dwelling Unit <br />Residential (with 1-9 Dwelling Units) $ 74.95 $ 75.11 $ 76.68 $ 78.24 <br />Multi-Family (with 10+ Dwelling Units) $ 74.95 $ 67.60 $ 69.01 $ 70.42 <br />Commercial/Non-Residential Sewer Rates(1) <br />Sewer Usage Charges: Rate per hundred cubic feet (hcf)of metered water use <br /> <br />Class A - Standard Strength, Low Flow $ 4.91 $ 5.75 $ 5.87 $ 5.99 <br />Class B - Low Strength $ 5.52 $ 6.69 $ 6.83 $ 6.97 <br />Class C - Standard Strength $ 6.15 $ 7.08 $ 7.23 $ 7.37 <br />Class D - Mod-High Strength N/A $ 11.27 $ 11.51 $ 11.74 <br />Class E - High Strength $ 14.93 $ 16.95 $ 17.31 $ 17.66 <br />Minimum Monthly Charge(2) $ 74.95 $ 67.60 $ 69.01 $ 70.42 <br />(1) Class A includes industrial accounts. Class B includes institutional/public accounts. Class C includes retail/commercial <br />accounts and hospitals. Class E includes restaurants and supermarkets. Class D is a new sewer customer class for <br />accounts with moderate-high wastewater strength, such as a result of a mixture of Class E uses and other uses on a single <br />account. <br />(2) Commercial customers currently pay a fixed monthly charge of $74.95 for the first 10 hundred cubic feet of billed usage. <br />Under the proposed rates, commercial accounts will be billed sewer usage charges for all metered use, subject to the <br />minimum monthly charge. <br /> <br />The following table shows the impacts of the proposed sewer rates across a range of <br />residential and commercial customers. Single family homes and other residential <br />accounts with up to 9 dwelling units will face an overall 4.4% sewer rate increase over <br />the next 3 fiscal years. Multi-family dwelling units with 10 or more dwelling units will face <br />6.4.B. - Page 2