Water Rates to Increase at Least 12 Percent

At Monday night’s budget study session, Public Works Superintendent Justin Ezell told the council that water rates could increase by as much as 15 percent in 2012. The increase comes directly from the San Francisco Public Utilities Commission’s rate increase of 38.4 percent to the cities.

The San Francisco Public Utilities Commission (SFPUC) is the sole water provider for all of San Mateo County, so cities have no choice but to accept the increase. Redwood City water rates increased 9 percent in 2010, and this same increase will again take effect July 1, 2011. But cities face the much larger increase of 38 percent on July 1 and will adjust local water rates in 2012 to reflect this increase.

“It’s beyond our control,” Mayor Jeff Ira said.

If the city were to maintain only a 9 percent increase over the next few years, the city’s water reserve fund would face a deficit of $138,000.

The average family pays approximately $55 to $56 each month for their water bill, Ezell said. A 9 percent increase would be around $5, and then a 12 to 15 percent increase in 2012 could range from $7 to $9 for families.

The average single family water bill in July 2009 among all agencies that purchased water from the SFPUC inclusive of the service charge was $51.32, according to the Bay Area Water Supply & Conservation Agency (BAWSCA). This was similar to Redwood City's 2009 water rate.

Ezell predicted another potential double digit water rate increase in 2013, depending on the increase in 2012. However, this rate should stabilize after these two increases.

Ironically, increased water conservation is partly to blame for the increasing water costs, Ezell said. With less demand for water, the utilities commission has to charge higher rates to generate similar revenue.

“They’re not just pocketing the revenues,” Ezell said.

Ezell added that this particular spike in charges will fund much-needed infrastructure upgrades to San Francisco’s 100-year old system.

“They’re the ones that got us here, and they should help us address this,” said Councilmember Rosanne Foust, who is a member of the council’s Utilities Committee.

Foust and Utilities Committee members Councilmember Barbara Pierce and Vice Mayor Alicia Aguirre will meet on July 27 to listen to Ezell’s presentation.

The council can choose to implement rate increases before then, but this would require a laborious process, Ezell said.

Ira added that the SFPUC even floated increases as high as 64 percent, but settled for 38 percent after many discussions.

To offset any further increases, the city is looking at ways to generate more revenue specifically for the water fund. They have looked into selling some recycled water to other cities and using automated metering to increase operational efficiency.