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City to Consider Water/Sewer Rate Increases

Good morning –
Each year, the City has consistently reminded our water/sewer customers that our dramatically fluctuating costs to provide these services were going to continue to require regular, moderate increases in the rates that customers pay, for the foreseeable future.
In short, when the City’s costs go up, those changes must be passed along to customers, as your water and sewer rates directly pay for these service, and are used only for those services.
This year the City will be considering a 9% increase in water/sewer rates in each of the next three fiscal years. This predictability is important, since our actual costs to provide water, for example, change significantly from year to year. Rather than saddle customers with the uncertainty of a 30% increase one year, a 4% reduction the next, and then an 11% increase the next, for example, it has been our practice to approve steady, more moderate increases each year (averaging about 8% – 10% annually) so that over time we keep pace with the overall cost increases – and avoid those drastic “see-saw” changes (which are mostly increases). Proposed sewer rate increases are a bit different, based more on the critical requirement to replace outdated facilities at the wastewater treatment plant (SBSA), and the need for ongoing repair and replacement of the City’s aging sewer infrastructure.
So with that said, I wanted to provide you with the news release below which gives more information – and you should visit www.redwoodcity.org/water to get the deeper detail that you probably want. Our Public Works staff is holding a community information meeting on this on May 22 (7 pm at 1400 Broadway), and the City Council’s public hearing is on June 10.
thanks,
~ malcolm
*******************

For Immediate Release
May 9, 2013

Contact:
Malcolm Smith
Public Communications Manager
(650) 780-7305

City to Consider Water and Sewer Rate Increases

Community Information Meeting – May 22 Public Hearing – June 10

Redwood City, CA – A safe, stable water supply and a  dependable sewage collection and treatment system are two of the most  basic, critical services provided to the community by Redwood City. No  one wants to turn on their faucet and see it run dry, or experience a  sewer line break in their neighborhood. When the next big earthquake  hits, having these systems in a condition to resist damage is of utmost importance. Redwood City is constantly working to ensure these systems are up-to-date, dependable, and safe. Water and sewer rates pay for  these services, and those rates are used only for these services.  However, there are significant and escalating costs involved with making   sure the community’s water and sewer services are readily available and  in good working order. When the City’s cost of providing these services  goes up, the rates must be raised in order to fund those escalating  costs.

To continue to fund the rising costs of providing these services, the City Council of Redwood City will be considering a 9% increase in water and sewer rates in each of the next three years – 2013/14, 2014/15, and 2015/16. If approved, the new rates will be  effective August 1, 2013; July 1, 2014; and July 1, 2015.

 

The public hearing will take place on Monday, June 10, 2013. The meeting starts at 7 pm at City Hall, 1017 Middlefield Road.

WATER – if approved, for a typical household (using 10 units of water every two months) that 9% will amount to increases of  about:

  • $3.33 per month in the first year
  • $3.60 per month in the second year
  • $3.91 per month in the third year

SEWER – if approved, for residents that 9% will amount to increases of about:

  • $5.21 per month in the first year
  • $5.68 per month in the second year
  • $6.18 per month in the third year

More detailed information is online at www.redwoodcity.org/water .

 

Prior to the June 10 public hearing a community information meeting will be held on Wednesday, May 22, 2013, at 7 pm, at the Public Works building,   1400 Broadway. There, the community can get information on water and  sewer services, the ongoing maintenance and improvement projects, and  the proposed rate increases. A notice of this proposed rate increase has   been mailed to all property owners, and includes information on the  procedure for protesting the proposal. That, and more information about the proposed rate increases, can be found www.redwoodcity.org/water.

 

The City staff and   Council understand that these difficult economic times are a struggle for many people, and share customers’ anxiety about escalating monthly bills. While any rate increase is unpleasant, hopefully this proposal is  not a surprise, as over the last few years the City has continually reiterated to the community that annual increases would be necessary for  the foreseeable future, due to unavoidable increasing costs. Even with  these proposed increases, Redwood City’s rates will still be at or below  the average for Peninsula communities, and the community will be   assured of the most dependable water and sewer services possible.

 

Redwood City buys all of   our community’s drinking water from one source – the  Hetch Hetchy  regional water system, administered by the San Francisco Public   Utilities Commission (SFPUC). The SFPUC rates have increased over the  years,  sometimes quite significantly (38% in 2011, for example), other times less-so.

 

In addition to the  actual cost of water, the City must also pay its share of  the financing   of the SFPUC’s $4.6 billion multi-year capital improvement program  to   upgrade the water distribution system. The purpose of those upgrades is  to  ensure seismic and delivery reliability, and meet water quality requirements,  and meet water supply goals. Redwood City’s portion is  paid partly through the  SFPUC wholesale water rate.

 

While Redwood City’s  total cost to acquire drinking water from the SFPUC is  expected to  decrease by 4.1% in FY 2013-14, it is projected to then increase by   30.2% in FY2014-15 and 10.7% in FY 2015-16. As in past years, Redwood  City tries  to “smooth out” those varying, unpredictable costs by  approving steady, moderate  increases each year so that over time we can   keep pace with the overall cost  increases without the drastic  “see-saw” range of increases we are faced with.  We’ve done this by  supplementing the rates with reserves (from the rates you’re  paying),  which allows us to keep pace, over time, with the actual costs of   providing a high quality, dependable water supply to the community.

 

As a result, there have been average annual increases of about 8-10% over the  last few years, instead of much higher and/or widely varying changes on a more  periodic  basis. The City must pass cost increases along to our customers in  order to continue  to fund the maintenance and operation of a reliable,  efficient, long-term water  supply system both for existing customers  and for the generations of the  future.

 

There   are a number of major regional and local projects to upgrade and  protect water and sewer systems, which are driving these proposed rate  increases. For the water system, projects include:

  • $80 million over the next 15-20 years for the repair, replacement, and maintenance of Redwood City’s drinking water system
  • $10 million annually over the next 25-30 years for Redwood City’s  share of the seismic upgrade of the Hetch Hetchy water system

For the sewer system, those projects include:

  • $200 million over the next 8 – 10 years for Redwood City’s   share of the replacement of outdated facilities at the regional sewage   treatment plant (SBSA)
  • $100 million over the next 8 -10 years for the repair/replacement of the City’s aging sewer infrastructure

In the coming years, Redwood City will continue to see additional proposed rate increases for both water and sewer services, in order to meet the increasing costs of providing these services. While such  increases are challenging, they are unavoidable and urgently needed in  order to ensure our community has quality water and sewer systems.
Please see www.redwoodcity.org/water to learn more about the proposed rate increases. 

Visit Redwood City’s award-winning website at  www.redwoodcity.org    for information about the City and its services, the community,  recreation programs, education, and local business. Subscribe to Redwood   City’s email newsletter and other City documents by visiting www.redwoodcity.org/newsletters.
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