AgdaPkt 2004-07-26 - Laserfiche WebLink

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�' � REPOR T - - C1 To the Honorable Mayor and City Council From the City Manager July 26, 2004 Subject Amendment of Sewer Service Charges Recommendation Introduce Ordinance Amending Redwood City Code - Section 27.100 - Sewer Service Charges Background The Sewer Fund is an "enterprise" fund, which by law is self-sustaining. All expenditures must be directly related to operations, maintenance, repairs and system replacement. Revenues must be segregated from other municipal funds and uses, and cannot be co- mingled with other activities. The City Council last approved an increase in the monthly Sewer Service Charge on July 14, 2003. Historically, the Council has supported moderate annual adjustments to the service charge within the range of 3% to 4.5% to account for cost increases. In Fiscal Year 2004-2005, revenues into the Sewer Enterprise Fund will be required to support a budget of $11,944,950, a 7.6% increase over last fiscal year. On June 28, 2004 staff presented to the City Council a summary of changes in the Sewer Enterprise Fund budget for Fiscal Year 2004-05 and advised the Council that a substantially higher increase in the Sewer Service Charge would be necessary to balance revenues and expenditures. At its July 2, 2004 meeting, the City Council Utilities Committee supported the following package of changes as this matter now goes to the full City Council for public hearing, consideration and final decision. One of the more significant factors driving the increase this year is a new South Bayside System Authority (SBSA) estimated capital expenditure of $3.0 million to replace the damaged outfall pipe into San Francisco Bay. The SBSA Commission approved a plan to spread the outfall replacement cost over 5 years, which results in Redwood City contributions to increase 8% for the first two years and then 6% for the remaining three years. A supplemental payment to the Facilities Replacement Fund, identified in the SBSA Capital Reserve Fund, covers the cost of the outFall replacement. Staff is recommending an 11.52% increase in the Sewer Service Charge, to cover total cost increases of $844,238. The most significant factors contributing to the increase in costs are as follows: • SBSA Treatment: Increase of $327,276 or 5.9% in SBSA wastewater treatment costs. • Support Services: Increase of $388,530 or 23.2%, primarily driven by increases to 1 of 3