AgdaPkt 2000-08-14 - Laserfiche WebLink

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REP�R T To the Honorable Mayor and City Council From the City Manager July 24, 2000 Subject Amendment of Water Rates and Basic Service Charge Recommendation A) Introduce Ordinance Amending Redwood City Code - Section 38.5 - Water Basic Service Charge. B) Adopt a Resolution Amending Section 3 of Water Regulations to increase Water "Lifeline" use rate from $0.82 to $0.86 per unit. Background The Water Fund is an "enterprise" fund, which by law is self-sustaining. All expenditures must be directly related to operations, maintenance, repair and system replacement. Revenues must be segregated from other municipal funds and uses, and cannot be co-mingled with other activities. There are two components of the water utility bilt for all customers, which work independently of each other: A) A fixed, monthly basic service charge that provides the financial support for the operations and maintenance of the City's water system, i.e.; salaries, benefits, equipment, supplies and services, which are within the direct control of the City Council. The City Council's Guiding Principles (attached) for the Water Enterprise Fund state that fixed costs and basic service charge revenues shall be in balance. The Enterprise fixed costs for FY 2000-01 will increase, primarily due to labor cost increases. B) A variable charge, calculated through usage rates and based on the consumer's metered water consumption levels. This component provides the financial support for purchase of wholesale water, electrical power from PG&E, capital improvements and the City's rights-of-way compensation charg.e. On June 28, 1999, the City Council approved an increase in the "Lifeline" rate (up to 10 units of water per bimonthly billing period) from $0.79 per unit (100 cubic feet or 748 gallons) to match the wholesale cost of $0.82 cents. The practice of matching the "Lifeline" rate with the wholesale cost was thus established. Recently, the San Francisco Public Utilities Commission (SFPUC) approved a 4.4% increase in "suburban" wholesale water rates effective July 1, 2000, from $0.82 to $0.86 per unit. Staff proposes that the practice of matching the "Lifeline" rate with the wholesale cost be followed and that the "Lifeline" rate be increased from $0.82 to $0.86 cents. Higher use rate tiers may be left unchanged for FY 2000-01. The Utilities Committee of the City Council supports the following package of changes as this matter now goes to the full City Council for public hearing and final decision: 1) Increase residential and commercial Basic Service Charge by 3.5% effective August 24, 2000. The current basic service charge of $9.75 per month would increase to $10.09.