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Redwood City 2000 URBAN WATER MANAGEMENT PLAN <br />require restriction. Redwood City will also consider water purchases and exchanges <br />to reduce the severity of restrictions under these conditions. <br />Prior to the initiation of any drought response programs, a draft plan will be <br />prepared for review by the City of Redwood City Council. The draft plan will <br />outline the water supply situation, proposed water use reduction objectives, <br />alternatives to water use reductions, methods to calculate water use allocations and <br />adjustments, compliance methodology and enforcement measures, and budget <br />considerations. <br />The proposed plan for implementation, will be advertised and presented for public <br />hearing at a regularly scheduled City of Redwood City Council meeting for <br />comment in accordance with the requirements of California Water Code Section <br />6066 of the Government Code. <br />Revenue and Expenditure Impacts During Water Shortages. Redwood City <br />uses a fixed service charge and a ratcheting increasing block rate structure to price <br />water. Current pricing includes all fixed costs under the service charge. Variable or <br />water costs are charged for under a block rate structure. Some revenue losses will <br />result from restrictions in sales, but the effect on services and the balance sheet <br />should be minimal. Under very severe restrictions budgetary shortfalls may require <br />water price increases. The Redwood City Water Enterprise Fund maintains an <br />emergency reserve fund that can be used to offset some of the revenue shortfalls. <br />July 15, 2002 37 Revision No. 1 <br />