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City Council Approves Water & Sewer Rate Increases
Annual increases over three years
approved at City Council meeting on June 10, 2013

Why is 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). 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, you’ve seen 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.

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

  • $8 million - $14 million annually over the next 5 years, continuing to escalate annually over the next 25 years, for Redwood City’s share of upgrades to ensure the seismic, delivery, and water supply reliability of the Hetch Hetchy water system (the City’s source of water)
  • $80 million over the next 20 years for the repair, replacement, and maintenance of Redwood City’s drinking water system    

What does the 9% water rate increase look like on my water bill?
The monthly basic service charge is proposed to be raised by 9% in each of the next three fiscal years.

In the first year, this would increase the current rate by $1.98 per month (from the current $22 to a new rateof $23.98). 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.”  A 9% increase in this rate would also be implemented in each subsequent year, for a total of three years.

The monthly consumption rate (the amount you pay per unit – 748 gallons – of water used) is proposed to increase by 9% for all customers, in each of the next three fiscal years. 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.

Here are examples of some typical single family bi-monthly (every two months) water bills with the first year's proposed rate increase, at various levels of water use.

(Note: year 1 only shown)

Units of Water
Used Bi-Monthly
Bi-Monthly Cost
at Current Rate
Bi-Monthly Cost
at New Rate
(year 1)
Bi-Monthly $ Increase
(year 1)
10
$73.30
$79.96
$6.66
15
$91.90
$100.21
$8.31
25
$129.10
$140.71
$11.61

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

 

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