AgdaPkt 2002-09-23 - Laserfiche WebLink

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To the Honorable Mayor and City Council From the City Manager~ September 23, 2002 Subject Amendment of Sewer Service Charges Recommendation Introduce Ordinance Amending Redwood City Code - Section 27.100 - Sewer Service Charges Background Council last approved an increase in the monthly (fixed) Sewer Service Charge on July 9, 2001 and opted to delay the date the new rate would take effect until January 1,2002, in consideration of the economic hardship that last year's energy crisis may have caused for residents. Based on the City Council Utilities Committee desire for minimal, well-justified, but steady annual adjustments for inflation, the City Council increased the monthly charge from $18.33 to $18.97, or 3.5%. The 10-year Sewer Enterprise business plan projects annual inflationary adjustments of 3.5% to 4.0%. In Fiscal Year 2001/02, staff recommended that no additional funds be budgeted or recovered via sewer service charges to offset electricity cost increases driven by the power crisis in California. Instead, staff proposed to track usage and costs and use unallocated fund balance to cover any real cost increases during the year. As result, the sewer fund balance was tapped to cover cost increases. During the year, staff made progress in reducing energy costs, through energy audits that help the City realize some savings and power rate adjustments that lowered costs, particularly at pump stations. Trends in energy consumption were tracked and staff kept the City Council Utilities Committee informed about the potential influences that energy and regulatory changes could have on setting the annual adjustments to sewer and water rates and charges. On July 29, 2002, staff presented to the City Council the Sewer Enterprise budget for Fiscal Year 2002/03 and advised the Council that a 3.5% to 4.5% increase in the Sewer Service Charge will be needed to balance revenues and expenditures. The City Council Utilities Committee supports the following package of changes as this matter now goes to the full City Council for public hearing and final decision. Staff is recommending a 4.0% increase to the Monthly Sewer Service Charge, to cover costs increases caused by the following factors: · Higher South Bayside System Authority waste water treatment costs (including energy increases), which increased by 5% over last year · Higher storm and sewer pump station energy cost, which increased by 39% in -- Fiscal Year 2001/02 (FY2002/03 budget allows for a 27% increase over FY 2001/02 budgeted amount) 1 of 2