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Billing and Collection Procedures The City of Redwood City issues a combined utility bill to each of its customers for water, sewer, and solid waste collection services (the City acts as the billing and collection agent for the private company, Allied Waste, which performs solid waste collection services under a franchise agent with the City) on a bi-monthly basis for residential customers and monthly basis for commercial customers. The utility bills are due and payable within 30 days of the bill date. If not paid within 30 days, the utility bill is delinquent and assessed a 1.5°/0 interest charge, and if still unpaid 40 days after the initial bill has been issued, another 5°1o interest charge is assessed. If the utility bill continues to be unpaid after the 5°1o interest charge, water service will be disconnected until payment is made. Current Water Rates, Fees and Charges Water rates are based on the City's costs for operating and maintaining the Enterprise, and on projected amounts required for the Enterprise capital improvement program. Current Water Rate Structure. There are two components of the water utility bill for all customers, which work independently of each other: . A fixed, monthly basic service charge that provides the financial support for the operations and maintenance of the City's water system, i.e.; salaries, benefits, equipment, supplies and services, which are within the direct control of the City Council. . A variable usage rate has been in existence since the drought of 1989, created for the purpose of promoting conservation. This component provides the financial support for purchase of wholesale water, electrical power from PG&E, capital improvements, conservation rebate programs and the City's rights-of-way compensation charge. The following tables sets forth both components of the Enterprise current rate structure, which was approved by the City Council in July, 2004. 26