AgdaPkt 2006-04-03 - Laserfiche WebLink

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community roundtable was held in April 2005, facilitated by the Civic Engagement and Facilitation Program of the Peninsula Conflict Resolution Center. In the course of the evening, the participants generated a considerable volume of input and ideas, drawn from their reactions to three different approaches for water rate increases. The overarching guidelines that the Committee applied to their June 2005 recommendation to the full Council were: . A refinement of the Water Enterprise Guiding Principles . A hybrid approach to rate increases based on community input that was further refined to insure that billing impacts for various customer classifications reflect the Committee's desire for equity and conservation . Confirmation that budgeted expenditures and projected revenues are in balance . Analysis of benchmarking average water bills on the Peninsula - which demonstrates that despite this significant increase, Redwood City remains one of the most cost-effective water retailers 8A Page 2 On June 6, 2005, the City Council approved the following adjustments to water rates and charges, as recommended by the Committee: . Increased the residential monthly Basic Service Charge from $11.56 to $12.00. . Increased consumption rates from 4% on the life line to 47% on the upper-most rate tiers for large users. For the adjustments in rates and charges to take effect July 1, 2006, the Utilities Committee has considered the 2005 public input - prior to and subsequent to - the approval of rate increases, and has provided direction to staff on the following basis: . Begin and complete the 2006 rate adjustment process before the affected 60-day billing cycle commences (May 1. 2006), so that public concerns and comments are heard and considered ahead of the period for which water bills may increase (July 1, 2006). . Consider the full scope of 2005 public comments and input as fully valid and applicable to Council deliberations for the 2006 adjustments. . Through a continued public hearing (open the hearing April 3 and close it April 24), provide ample time for interested community members to ask questions, provide comments and express concerns on proposed rates and charges increases. . Consider a phased-in shift of debt services costs from water bill "variable" costs (supported by consumption rates) to "fixed" costs (supported by the Basic Service Charge), as revenue bond proceeds are expended on new facilities and recycled water begins to be produced and distributed. The recommended portion of costs to be initially shifted to the Basic Service Charge is 25%. . Be mindful of the need to continue to affect conservation practices by utilizing a tiered, conservation rate structure. Monitor the ratio of revenues derived from rates and from the fixed monthly service charge. The emerging rule-of-thumb in the conservation field is maximum 40% of revenues from fixed service charges. Currently 27% of revenues come from the basic service charge: With the recommended shift of debt services costs, the ratio of revenues coming from the basic service charge changes from 27% to 31 %. . Per the Water Financing Plan, include anticipated wholesale rate increase on July 1,2006 from the San Francisco Public Utilities Commission, from $1.02 to $1.16 per unit (last year there was no change in wholesale rates). This 14% increase equates to a variable cost increase for Redwood City of $634,000, all of which must be recovered via the consumption rates to customers. Page 2 of 4