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<br />8A <br />Page 3 <br /> <br />In summary, the Utilities Committee and staff recommendation for Council consideration is: <br />1. Increase the residential monthly Basic Service Charge from $12.00 to $14.25, <br />effective July 1, 2006. The increase includes shifting 25% of annual debt service <br />costs from the variable to fixed portion of utility bills. <br />2. Increase consumption rates effective July 1, 2006 as follows (one unit of water <br />equals 748 gallons): <br />a. For the first 10 units of water consumption, increase the residential "Lifeline" <br />rate from $1.18 to $1.28 <br />b. For 11 to 25 units, increase the residential rate from $2.16 to $2.26 per unit. <br />c. For 11 to 50 units, increase the residential rate from $2.74 to $2.84 per unit. <br />d. For 11 to 75 units, increase the residential rate from $3.53 to $3.63 per unit. <br />e. For 11 to 75+ units, increase the residential rate from $4.32 to 4.42 per unit. <br />f. For 1-15 units, increase the commercial rate from $2.16 to $2.26 per unit. <br />g. For 1-75 units, increase the commercial rate from $2.74 to $2.84 per unit. <br />h. For 1-75+ units, increase the commercial rate from $3.53 to $3.63 per unit. <br />3. Direct staff to proceed with a comprehensive review of the rate structure for <br />commercial and residential customers, and come back to the Council via the Utilities <br />Committee with recommendations for alternative methods that would address equity <br />and effectiveness issues that have been put forward from the community. <br />Additionally, request that staff evaluate "area-based" or "budget-based" rates, in <br />which the tiers are based on an assigned water budget for the billing period for <br />irrigation accounts that are calibrated to each specific irrigation customer site. <br /> <br />This Recommendation: <br />. Supports the guiding principle of basic service charge equal to fixed costs, by <br />commencing a shift of a portion of annual debt service costs from the variable to <br />fixed portion of utility bills. <br />. Maintains Redwood City's cost effectiveness benchmark status when compared to <br />13 other agencies (4th most cost-effective). Because other agencies have not yet <br />calculated next year's rates, Attachment Four shows that Redwood City's position <br />does not change at the 15 unit comparison level with the proposed rates. Even if <br />none of the agencies increase their rates, Redwood City bills will be 7% below <br />averages and medians. <br />. Reinforces the need for more outdoor conservation practices among large users <br />. Continues to allow individual users to conserve and save money <br />. Is consistent with the principle "The more you use, the more you pay". <br /> <br />Alternative <br />The Council could reject or modify the Utilities Committee/staff recommendation. <br /> <br /> <br />Fiscal Impact <br />The recommended package of rates and charges will increase revenues for Fiscal Year <br />2006/07 by $2.3M over the budgeted revenues for Fiscal Year 2005106, which is the <br />targeted amount delineated in the Water Financing Plan - 2006 Update. <br />/") <br />/ /.¡ // .' l <br />,/// /' Ij' <br />.I /í/ Ii ¡ . <br />I . /;i ' ..- <br />jý:(A.¿<-t .V <br /> <br />Ed Everett <br />City Manager <br /> <br />Manny Rosas <br />Public Works Superintendent <br /> <br />Peter Ingram' , <br />Director, Public arks Services <br /> <br />Page 3 of 4 <br /> <br />