AgdaPkt 2010-04-12 - Laserfiche WebLink

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8C Page 1 REPORT To the Honorable Mayor and City Council From the Ci Mana er April 12, 2010 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 water 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 Utility Bill has two components related to water charges that 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. 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 June 1, 2009, the City Council approved a 9% increase to water rates and charges for Fiscal Year 2009-10, as recommended by the Utilities Committee. This increased the residential and commercial monthly Water Service Charge from $16.05 to $16.53 and the monthly Water Quantity Rates by 12%) effective July 20, 2009 (the overall increase was 90,10). In early 2010, the Utilities Committee again discussed the need for future increases in water rates. This series of increases is consistent with those imposed by other local water agencies and is necessary to balance the Water Fund. On February 24, 2010, and in accordance with the Proposition 218 notification requirements, written notices of proposed increases in water rates for Fiscal Years