AgdaPkt 2000-08-14 - Laserfiche WebLink

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�o -�. REPO RT To the Honorabie Mayor and City Council From the City Manager � July 24, 2000 Subject Amendment of Sewer Service Charges Recommendation Introduce Ordinance Amending Redwood City Code - Section 27.100 - Sewer Service Charges Background On July 12, 1999 the City Council raised the fixed sewer service charge from $17.25 to $18.33 per month, in order to balance Sewer Enterprise Fund annual revenues with costs for Fiscal Year 1999/2000. Although the 6.26% increase was significant, the 3-year average increase (through FY 99/00) was 2.8%. As the economy has grown and costs for labor have increased, the City Council Utilities Committee (Council members Ira, Claire and Pierce) has taken the position that gradual, incremental and well-justified service charge increases to keep pace with inflation are preferable to erratic changes in utility bills. The Committee has also emphasized cost controls and benchmarking with other agencies to keep citizen's sewer bills as affordable as possible. Accordingly, the Committee now recommends revising the monthly fixed sewer service charge to $18.97. The final draft Sewer Enterprise Fund 10-Year Business P/an (summary sheets attached) is complete. The plan forecasts revenue requirements and the corresponding fixed monthly sewer service charges necessary to balance the fund over a 10-year period. Assuming no additional program costs are imposed on the fund and using cost increase assumptions similar to the General Fund budget, an average annual increase in service charges of 3.73% will be required. On May 8, 2000, the City Council approved in concept the staffs recommended "Alternate 1" funding plan for implementing the Strategy to Address F/ooding Problems plan approved Feb. 28, 2000. Of the total $11.55 million estimated cost, Council will have appropriated $5.35 million by the end of FY 2001/02 to complete phases I, II and III of the 5' Avenue / Bay Front Storm Drainage project, leaving an additional $4.2 million required to complete phases IV and V by 2006. The . question of funding the proposed Cordilleras Creek bypass project ($2 million) in FY 2003/04 is contingent on a technical review, to be addressed in the next CIP budget cycle. The Council directed staff to work with the Utilities Committee in drafting an action plan and schedule for pursuing additionaf funding sources and reaching a decision on the use of revenue bonds supported by an increase in sewer service charges citywide. The Utilities Committee met on June 6, 2000 to consider the question of issuing revenue bonds and to determine the effect that debt service payments would have on monthly sewer bills. Their conclusions, while not unanimous, were: • Adding a fixed debt cost to finance $3.5 million in flood program construction will result in an 8.7% increase in sewer service charges, or $1.00 per month per account. • The nexus between properties that would benefit and those who would pay, while tangible, tacks the desired 'targeted' approach to financing projects. It was suggested that more visible public projects, such as community centers and recreation facilities, might be a better fit for bond financing. 1 of 2