AgdaPkt 2007-07-09 - Laserfiche WebLink

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'R"'<I'~Lp_L',O" 'R" ':r'.:':,' , '_' I . . . .' . ". - .c., ....... , . " _...... r .. .... . . . Be Page 1 ,To ttw ~Ie Mayor and Oi.'Cou~il , " from the~ Ci ,i Mana '<< ... . '. , ..__... 'N' .',.. July 9,2007 SUBJECT Amendment of Sewer Service Charges RECOMMENDATION Convene Public Hearing and Introduce Ordinance Amending Redwood City Code - Section 27.100 - Sewer Service Charges Increasing the Basic Monthly Rate from $33.00 to $35.66 BACKGROUND City Council action is needed to convene a public hearing to consider an increase to the sanitary sewer service charges for FY 2007-08. The increase is necessary to ensure that sufficient revenues are available to support the expenses associated with the operation and maintenance of the sewer collection system and for the treatment and disposal of the City's sewerage. The Sewer Fund supports two major service components: 1) the collection system, maintained and operated by Redwood City, which is comprised of sewer main lines in city streets, the public portion of lateral (or service) lines, and pump stations that transmit sewage to the 2) wastewater treatment plant, operated and maintained by South Bayside System Authority (SBSA), which treats and processes wastewater before discharging it into San Francisco Bay. The City Council typically adjusts sewer service charges annually, following the SBSA Commission's budget decisions; analysis and recommendations from the Council's Utilities Committee; and in concert with consideration of the city's operating and capital budgets. This year the City initiated the 45-day Proposition 218 public notification process on May 18, 2007. The SBSA Commission completed and approved its final budget for FY 2007-08 on May 31, 2007. While the final SBSA costs are not currently reflected in the proposed budget document for FY 2007-08, the proposed sewer rate increase is sufficient to cover all expenses anticipated for FY 2007-08. The proposed rate is based on revenue demand projections contained in the Sewer Enterprise 10- Year Financial Plan and Rate Study initiated in September 2006 and prepared by the independent public finance advisory firm, Bartle Wells Associates. City Council must consider a mid-year budget adjustment to update the revenue demand (final SBSA costs) to match the revenue that will be generated by the proposed rate increase. Staff is proposing that the current $33.00 basic monthly sewer service charge be increased by $2.66 or 8% to $35.66 per month beginning with bills issued as of August 27, 2007. Further, sewer rate increases of between 8% and 20% are proposed for commercial user classes, Le. restaurants, hospitals and retail/commercial. Over the past ten years, commercial user rates have increased by less than 1% per year. The proposed commercial rate increases will realign the commercial rates with the cost of providing service.