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City Council Approves Water & Sewer Rate Increases
New rates became effective July 1, 2012

Updated July, 2012

During the water and sewer rate adjustments that have been made over the last several years, the City has consistently indicated that similar increases would be occurring each year for the foreseeable future. In 2010, the City Council approved a two-year increase in water and sewer rates for fiscal years 2010/11 and 2011/12. As we neared the end of the 2011/12 fiscal year, it was time to re-examine the rates for both water and sewer services.

The City Council approved water and sewer rate increases at a public hearing on May 7, 2012.

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. And when the next big earthquake hits, having these systems in a condition to resist damage is of utmost importance. The City is constantly working to ensure these systems are up-to-date, dependable, and safe. There are significant and escalating costs involved with making sure your water and sewer services are always available and in good working order. Your water and sewer rates pay for these services (and those rates are used only for these services), and when the City’s cost of providing them goes up, the rates must be raised in order to fund those escalating costs.

Redwood City's approved increases:

  • A 12% increase for water rates
    (about $4 per month for a typical household)
  • A 9% increase for residential sewer rates
    (about $5 per month; commensurate increases were approved for commercial sewer accounts, based on water usage and business type)

Please note: even with these increases, Redwood City’s water and sewer rates will still be at or below average for Peninsula communities.

We know that these difficult economic times are a struggle for many people, and we share your anxiety about escalating monthly bills. While any rate increase is unpleasant, hopefully this increase is not a surprise, as over the last few years we have continually reiterated to the community that annual increases would be necessary for the foreseeable future, due to those increasing costs. And, please understand that every dollar you pay in water and sewer rates goes back into those systems. None of those funds are used for any other purpose.

Why was a water rate increase necessary?
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). That agency's wholesale water rates are going to be raised by 10% this year. The SFPUC has annually raised wholesale rates, often quite significantly (38% last year, for example), largely to pay for seismic upgrades to the Hetch Hetchy water pipeline system.

The graph above shows the cumulative increases by the SFPUC, versus those by Redwood City, since 2008. As you can see, the City has tried to “smooth out” those sharp, unpredictable increases by approving more steady, moderate increases each year – most often lower than SFPUC’s increase, sometime a little higher, like this year – so that over time we can keep pace with SFPUC’s prices without the drastic “see-saw” range of increases imposed on us by that agency. 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, you’ve seen average annual increases of about 8-10% over the last few years, instead of much higher increases 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.

The current (and future proposed) water rate increases are needed to fund:

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

What does the 12% water rate increase look like on my water bill?
The monthly basic service charge, which was $19.64 per month, was increased by 12% on July 1, 2012 to $22. This rate adjustment to the monthly basic service charge was necessary to pay for increasing costs of equipment, supplies, salaries, and services required for the operation and maintenance of the water system, or what might be called our “fixed costs.”  

The monthly consumption rate (the amount you pay per unit – 748 gallons – of water used) increased by 12% for all customers. The revenue from the consumption rates pays for the purchase of wholesale water, power to run the pumping systems which transport the water, capital improvements to the water system, our active water conservation program, and the cost of our recycled water program.

With both of these elements of your bill taken together, the average overall increase is about 12%.

Examples of some typical single family monthly (every two months) water bills with the rate increases, at various levels of water use:

Examples of Units of Water Used
Bi-Monthly
Bi-Monthly Cost
at OLD Rate
Bi-Monthly Cost
at APPROVED NEW Rate
(July 1, 2012)
10

$65.48

$73.30

15

$82.08

$91.90

25

$115.28

$129.10

75

$442.53

$495.60

(Note: one unit = 100 cubic feet or 748 gallons)

Why was a sewer rate increase necessary?

Redwood City provides wastewater service to approximately 26,500 residential and 1,500 commercial customers located in and around the City. Wastewater is collected via a network of 192 miles of sewer pipelines and 31 sanitary sewer pump stations, and is then transported to the SBSA for treatment and disposal.

As in the past few years, an increase in sewer rates is urgently needed for two purposes:

  • The replacement of outdated facilities at the South Bayside System Authority (SBSA), where Redwood City’s wastewater is treated. The total cost of those projects is nearly $400 million and, based on our community’s portion of the usage, Redwood City is responsible for over $200 million of that, over the next decade.
  • The ongoing repair and replacement of the City’s aging sewer infrastructure, including pipeline replacement and sewer pump station rehabilitation, to ensure your home has dependable, quality sewer service. The City’s program to replace pipelines and upgrade sewer pump stations has an estimated cost of over $100 million over the next 10 years. Without annual increases in rates, there would not be enough funding to carry out this program, putting parts of our sewer system at increased risk of failure. In the coming fiscal year we will replace or rehabilitate approximately 17,000 linear feet of sewer pipeline, and begin design and rehabilitation or improvements to three sewer pump stations.

What does a 9% sewer rate increase look like on my sewer bill?

Approved Increases to Monthly Basic Sewer Service Charge for RESIDENTIAL Customers

Monthly cost at OLD rate

Monthly cost at APPROVE NEW rate
as of July 1, 2012
$ Increase
per month
$53.10 $57.88 $4.78


Approved Increases to Service and Usage Charges for COMMERCIAL Customers

The minimum monthly charge for all commercial sewer customer types increased from its old rate of $53.10 to $57.88 as ofJuly 1, 2012.

The new commercial usage rates, for water usage above the minimum charge, are based on the number of units of water used, depending on the type of business.

Approved Increases to Usage Rates for COMMERCIAL Customers

COMMERCIAL Customers
(Non-Residential)
OLD
rate per unit
APPROVED NEW rate
per unit
$ Increase
per unit
Institutional / Public

$3.91

$4.26

$0.35

Retail / Commercial

$4.36

$4.75

$0.39

Hospitals

$4.36

$4.75

$0.39

Restaurants

$10.58

$11.53

$0.95

Supermarkets

$10.58

$11.53

$0.95

Industrial

$3.48

$3.79

$0.31

(Note: one unit = 100 cubic feet or 748 gallons)

What is the consideration / approval process for the water and sewer rate increases?

  • A Proposed Rate Increase mailer ("Prop 218 notice") was sent to all Redwood City water and sewer customers - March 20, 2012
  • A Community information meeting was held - April 4, 2012, 7 pm, Public Works building, 1400 Broadway.
  • The City Council held apublic hearing on proposed sewer and water rate increases - May 7, 2012, 7 pm, City Hall, 1017 Middlefield Road
  • The approved new rates became effective July 1, 2012

What was the process for protesting the proposed rate increase?
Water and sewer customers have the right to protest the proposed rate increases, and if more than 50% of affected property owners submit a valid written protest of the proposed increase, then the increase cannot be approved.

As outlined in the mailer to all customers, written protests were required to be received by 5 pm, Monday May 7, 2012, to Water/Sewer Rates, City Clerk, City of Redwood City, 1017 Middlefield Road, Redwood City, CA 94063, or could be presented to the City Council prior to the close of the Public Hearing that evening.

In the coming years, Redwood City will continue to see additional rate increases proposed for both water and sewer services, in order to meet the increasing actual costs of providing these services. While such increases are challenging, they are unavoidable and urgently needed in order to ensure our community has a quality water and sewer system, which are among the most basic and fundamental services that the City provides to the people who live and work here.

And again, the City fully recognizes that many in our community are facing financial challenges. These necessary increases are not something that that the City or the City Council takes lightly. They are being proposed only after the most careful and thoughtful consideration of how to structure these annual rate increases so that the impact to households and businesses is as moderate as possible.

If you would like to speak to someone about water or sewer rate increases, or about any issues related to these services, please feel free to call Redwood City's Communitiy Development Department, Public Works Division, at 650-780-7464.


 

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