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City Council Approves 2-Year Water Rate Increase
New rates will be effective July 1, 2010
and July 1, 2011

April, 2010

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. At a public hearing on April 12, 2010, the City Council approved a two-year increase in water service charges and consumption rates.Water rates will increase in each of the next two fiscal years by an average of 9% (when combining the proposed increases in the monthly basic service charge and the monthly consumption rates).

Why is this 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). The rate increases are largely a result of significant continuing increases in the wholesale cost of water from the SFPUC (their increase is projected at 15.2% for fiscal year 2010/11, and 10.2% for fiscal year 2011/12).

The City must pass these cost increases along to our customers in order to fund the maintenance and operation of a reliable, long-term water supply system. These efforts enable the City to continue to provide the most reliable and efficient water supply to our community possible, both for existing customers and for the generations of the future.

However, in order to reduce the “price shock” to our customers, Redwood City has implemented consistent annual rate increases to spread out those large SFPUC increases more evenly. As a result, you’ve seen average annual increases of about 8% to 9% over the last few years, instead of much higher increases on a more periodic basis.

Unfortunately, these wholesale water cost increases are expected to continue as the Hetch Hetchy rebuilding project gets under way, so Redwood City and its customers will continue to see additional rate increases in the coming years.

What does the average 9% increase look like on my water bill?
The monthly basic service charge, which is currently $16.53 per month, will increase by 9% on July 1, 2010 to $18.02, and another 9% on July 1, 2011 to $19.64. This rate adjustment to the monthly basic service charge is 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) will increase by an average of 9% 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 9%.

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

Units of Water Used Bi-Monthly
Bi-Monthly Cost at Current Rate
Bi-Monthly Cost at Proposed Rate
as of July 1, 2010
Bi-Monthly Cost at Proposed Rate
as of July 1, 2011
10

$55.06

$60.04

$65.48
15

$69.06

$75.29

$82.08
25

$97.06

$105.79

$115.28
75

$372.56

$406.04

$442.53

What was the approval process for the water rate increase?
The City Council discussed, considered, adn approved the proposed two-year water rate increase at a public hearing on April 12, 2010. As required by law, the City mailed out public hearing notices to all its water customers.

The new water rates will become effective on July 1st, 2010, and July 1st, 2011. All bills generated on or after that date are impacted by the new rates.

(Go to Water Services main page)

 

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