AgdaPkt 2007-02-05 - Laserfiche WebLink

Browse Search

98 Page 4 City of Redwood City Proposed Water Capacity Charge Final Draft -Includes Utilities Committee Comments - Updated Jan. 3D, 2007 Purpose A. Implementation of the adopted 2006 Water Financing Plan ("Plan"). B. Supports the overarching goal of eliminating Redwood City's overdraft of drinking water from the San Francisco regional water system by 2010. C. Increases Water Enterprise Fund revenues to cover a "fair share" of construction costs of the recycled water project. Policy Assumptions 1. The combination of increasing water rates and basic service charges for Redwood City drinking water customers provides balanced revenues and expenditures annually in the Water Enterprise Fund. 2. While revenues from rates and charges can be forecast with some certainty, the City has no control over the timing, frequency, or magnitude of new connections via development applications. Therefore, the Plan makes no assumptions about revenues from a new Capacity Charge, and therefore the full burden of constructing the recycled water system (including debt service on bonds) is 100% loaded into water rates and service charges. 3. To ensure equity between current and future water customers, a Water Capacity Charge should be implemented on the basis of projected water use by new customers (using the City Engineering Standard "Attachment Q" methodology). 4. A future "Redwood City Sub-Regional Recycled Water System" could supply 2,500 to 5,000 Acre Feet /year to other water agencies, above and beyond the 2,000 to 3,240 AF/yr needed within the Redwood City water service area. 5. Cost allocation will be based on estimated construction costs for Phase One only (east side of Hwy. 101): $74.2M + 7,000 AF/yr maximum treatment/production = $10,600/AF, or an estimated range of $1 ,975 per new condominium, to about $3,700 for a new single family home, to $116,000 for a new 50-room hotel. 6. If and when the Council enters into agreement(s) for delivery of recycled water to other communities on a wholesale basis, terms and conditions will be based on a new set of City Council guiding principles for selling recycled water to other water agencies. Draft guidelines are being discussed by the Utilities Committee. 7. All debt service for revenue bonds has been added into the water enterprise rate base. As such, both current and future water customers will pay increments of the financing costs of the project via their water bills. 8. As revenues are collected via the new Water Capacity Charge andlor contracts with other water agencies, the City Council will have options on how to use those additional funds to mitigate the effects of capital costs on Redwood City's water customers. This approach creates equity and fairness. Recommendation Staff recommends that the Water Capacity Charge be considered concurrently with the proposed Park Standard and Park Development Fee, and implemented by July 2007. Attachment: Sample Water Capacity Charges for Future Development/New Customers