AgdaPkt 2013-06-10 Interview Closed and Joint

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7. B. - Page 2 The City Council typically adjusts sewer service charges each fiscal year in consideration of the operating and capital budgets of the City and SBSA. On March 6, 2013, the City Council's Utilities Committee ("Utilities Committee") recommended a 9% increase per fiscal year for the next three fiscal years. The Utilities Committee considered a two-year cycle, but determined that such direction would once again place the rate setting in the middle of the City's regular two-year budget cycle. Consequently, the Utilities Committee recommended that the rate increases be established over a three-year period to then bring the rate setting into line with the other City budgets. ANALYSIS The SBSA's infrastructure replacement and repair projects continue to be the primary factor for the proposed sewer service charge increases in the Sewer Fund. The SBSA's total projected replacement and repair costs are slightly more than $400 million (with cost inflation) over the next 10-year period. Redwood City's estimated share of these costs is $200 million. Additionally, the proposed rate increase will continue to support the ongoing repairs and replacement of the City's sewer collection infrastructure, which is projected to cost over $100 million over the next 10 years. The City's proposed rate increase is based on revenue required to meet the increasing costs of service and SBSA infrastructure projects, and is contained in the updated Sewer Enterprise 10-Year Financial Plan and Rate Study prepared by the independent public finance advisory firm Bartle Wells Associate (copy of this study is on file in the City Clerk's Office). Based on direction given by the Utilities Committee, staff recommends increasing the basic monthly sewer service charge as follows: Residential Sewer Customers Current Proposed Proposed Proposed Proposed Monthly Rate Monthly Rate Monthly Rate Monthly Rate Percentage as of August as of July 1, as of July 1, Increase 1, 2013 2014 2015 $57.88 $63.09 $68.77 $74.95 9% per year Commercial Sewer Customers The Commercial sewer charge consists of two parts. A minimum monthly charge and a metered usage charge. The minimum monthly charge equals the residential Basic Service Charge. The proposed minimum monthly rate increases are as follows: