AgdaPkt 2009-06-01 - Laserfiche WebLink

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78 Page 1 Ft". E'"'' PO' R'.T .. " .. V' . . '" June 1,2009 SUBJECT Approval of Water Utility Service Rates and Charges RECOMMENDATION 1. Introduce Ordinance amending Redwood City Code - Section 38.5 - Water Basic Service Charge. 2. Adopt a resolution amending Section 3 of the Rules and Regulations of the Redwood City Water Department (Public Works Services Department) related to wa te r rates. BACKGROUND The Water Fund is an "enterprise" fund, which by law must be self-sustaining. All expenditures must be directly related to operations, maintenance, system repair and replacement. Revenues must be segregated from other municipal funds and uses and cannot be commingled with other activities. The Customer Water Utility Bill has two components which work independently of each other. These are: A. A fixed, monthly basic service charge that provides the financial support for the operations and maintenance of the City's water system (Le.; salaries, benefits, equipment, supplies and services), which are within the direct control of the City Council. The City Council's Guiding Principles (attached) for the Water Enterprise Fund state that fixed costs and basic service charge revenues shall be in balance. The Enterprise fixed costs for Fiscal Year 2009-10 will increase, primarily due to labor and retiree medical cost increases. B. Variable usage rates, based on the principle of rewarding conservation and the methodology lithe more you use, the more you pay", has been in existence since the drought of 1989, created for the purpose of promoting water conservation. This component provides the financial support for purchase of wholesale water from the San Francisco Regional Water System, electrical power from PG&E, capital improvements, the City's water conservation programs and the City's recycled water bond payment. On May 12, 2008, the City Council approved the following adjustments to water rates and charges for Fiscal Year 2008-09, as recommended by the Utilities Committee: . Increased the residential and commercial monthly Water Service Charge by 30/0 from $15.60 to $16.05 effective June 20, 2008. . Increased the monthly Water Quantity Rates by 90/0 effective June 20, 2008.