AgdaPkt 2000-08-14 - Laserfiche WebLink

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�OC•3 2) Increase residential "Lifeline" water rates from $0.82 to $0.86 per unit of water (0 to 10 units per billing period) effective August 24, 2000. Alternatives The Utifities Committee met on June 6, 2000, and considered several altematives that were developed by staff. Issues discussed were: A) Continuing the practice of matching the "Lifeline" rate with the water wholesale cost. B) The standing guiding principle of funding the fixed costs with the monthly service charge. C) The use of non-operating revenues from `A' and 'B' above to fund future water supply improvements, water conservation and the potential development of recycled water. Conclusion After thoroughly evaluating each alternative, the Committee agreed to support a modified alternative and directed staff to proceed with full development of the proposed recommendation. The Committee's conclusions were: A) An Increase in the monthly basic service charge of 3.5% from $9.75 to $10.09, is required to cover cost increases that were previously projected and that reflect gradual, incremental and well-justified service charge increases to keep pace with inflation. Such an approach is seen as preferable to erratic changes. The Committee has also emphasized cost controls and benchmarking with other agencies to keep citizen's water bills as affordable as possible. B) An Increase in the "Lifeline" rate from $0.82 to match the new wholesale rate of $0.86 is a reasonable practice. All of the higher use rate tiers should be left unchanged now. However, the Committee is interested in looking at altemative conservation rate structures in concert with `C' below and a business plan update in the near future. C) Non-operating �evenues were identified as a prudent way to save funds for development of future water supply, including water conservation and the continuation of effort to secure a recycled water project. This was noted as consistent with the City Council's priority- setting discussions in early 2000. The proposed increase in water bills will not change the City's "Low Cost / Low Use" position in the benchmarking analysis for water rates relative to per capita daily consumption (see attached Public Works Services Performance Measure, Average Monthly Single-Family Water Bills Relative to Per Capita Daily Consumption, from page 276 of the Redwood City Proposed Budget, FY 2000/01/02). Fiscal Impact If the Council approves the proposed changes to the water rates and basic service charges as recommended, a Redwood City residential customer's bimonthly water utility bill at the City's average consumption level of 22 units per billing period will increase by $1.00 or 2%, from $48.70 to $49.70. The bimonthly water bill at the level of 30 units billing period will increase by $1.00 or 1.5% from $67.70 to $68.70. See attachments for summary of fund revenues and expenditures, impacts to water/sewer bills at various levels of water use and benchmarking data. Increases would take effect beginning August 24, 2000. � /, i Peter Ingram Ed Everett Public Works rvices Director City Manager Attachments 1. Rates 8� Charges — Summary 8� Chart 4. Water Fund 10-Year Business Plan 2. Summary of Billing Impacts 5. Water Fund Guiding Principles 3. Performance Measures Graph 6. Ordinance and Resolution . _ __ . _ _ ._,.._ t_