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7.A. - Page 1 <br /> RE PO RT <br /> To the Honorable Mayor and City Council <br /> From the Cit Mana er <br /> June 10, 2013 <br /> SUBJECT <br /> Public Hearing On Proposed Increase To Water Utility Service Rates And Charges <br /> RECOMMENDATION <br /> Conduct Proposition 218 Public Hearing On Proposed Increase To Water Utility Service <br /> Rates And Charges; and Waive First Reading and Introduce Ordinance Amending <br /> Redwood City Municipal Code Section 38.5 (Water Service Charge). <br /> BACKGROUND <br /> Proposition 218 Hearing: <br /> Article XIIID, Section 6 of the California Constitution, which was adopted by the voters in <br /> 1996 as part of Proposition 218, requires that local governments give a special form of <br /> mailed notice at least 45 days before holding a public hearing on the increase of a <br /> property-related fee. The provision also provides that certain affected persons may <br /> submit protests with respect to proposed rate increases. In connection with the <br /> proposed increase to City water utility service rates and charges, on March 22, 2013 the <br /> City mailed 26,000 notices to property owners, and a revised notice on April 26, 2013. <br /> The revised notice set June 10, 2013 as the public hearing date to consider the <br /> proposed increase to water service rates and charges. <br /> Water Utility Service Rates and Charges: <br /> The City's Water Fund is an "Enterprise" fund, which by law must be self-sustaining. All <br /> expenditures must be directly related to operations, maintenance, system repair and <br /> replacement. Revenues must be segregated from other municipal funds and uses and <br /> cannot be commingled with other activities. The Water Fund is completely separate <br /> from the City's General fund. <br /> The Water fund is sustained by water related charges collected through customer utility <br /> bills. The Utilities Bill has two components related to water charges. These are: <br /> • Water Service Charge: <br /> The Water Service Charge is a fixed, monthly basic service charge that provides <br /> the financial support for the operations and maintenance of the City's water <br /> system, i.e., salaries, benefits, equipment, supplies, and services. The City <br />