News

Menlo Park: Water rate hikes proposed

 

Customers of the Menlo Park Municipal Water District should keep an eye on the mailbox for a notice explaining the utility's proposed increases to water rates.

Those in Tier 1 -- using up to 600 cubic feet (about 4,500 gallons) of water per month -- would see their rates go up by $4.51 per centum cubic foot the first year and then increase 5.4 percent over the next three years. Tier 2, using more than 600 cubic feet, would increase by $4.64 per centum cubic foot the first year and then increase 14.5 percent for years two through five, according to the city. Increased fees for fixed monthly charges and a drought surcharge starting at $0.29 per centum cubic foot the first year are also included in the rate adjustments.

A public hearing will be held in July before the City Council votes on the proposed rate increases.

Click here to review a staff report on the changes.

— Sandy Brundage

Comments

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Posted by Steve
a resident of Menlo Park: Central Menlo Park
on May 27, 2015 at 12:16 pm

Sandy -
I think you mean ccf (100 cubic feet). I doubt my dog could get by on one cubic foot of water per month. One ccf = 748 gallons, which is a bit more reasonable.


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Posted by Sandy Brundage, Almanac Staff Writer
a resident of Menlo Park: Downtown
on May 27, 2015 at 12:20 pm

Thanks, Steve, I inadvertently dropped the 0s. 6 ccf = about 4500 gallons.


2 people like this
Posted by Steve
a resident of Menlo Park: Central Menlo Park
on May 27, 2015 at 1:12 pm

Sandy -
Still not quite right: "6 cubic feet (about 4,500 gallons)"
Should be "6ccf (about 4,500 gallons)" or "600 cubic feet (about 4,500 gallons)"


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Posted by menlo resident
a resident of Menlo Park: The Willows
on May 29, 2015 at 3:18 pm

So, we've spent some time studying the Public Works Recommendation on Water posted by Ms.Brundage.

This is what we came up with. Did anyone else come up with something different-because we're hoping we're wrong.

The top tier users (large residences and commercial properties accounting for 18% of users and 71% of revenues) are getting a $0.75 (14%) rate cut while current tier 1 users are getting a $1.82 (67%) rate increase.

It is true that wholesale water prices have been increasing and Menlo Park needs to meet these costs -- rates need to go up. Why would any plan to cover higher costs cause rates to go down for anyone?

In the recommendation's own words, "The inclining tiered rate structure reflects the proportionate increase in costs associated with additional demand placed on the system and provides more conservation incentive as customers use more water." In the previous 4-tier system, significant differences (roughly 25% per tier) were implemented, indicating strong incentives and differences in costs. In the proposed 2-tier system, the initial difference is only $0.13 or 3%, which seems to indicate little difference in cost and a lack of incentive.

Furthermore, "The tier breakpoints are designed to provide a reasonable amount of water for efficient indoor and outdoor water use for a typical single family residential household [2.52 persons]." The bullet point immediately following states that tier 1 "is the minimum efficient domestic (indoor) water use for 2.5 person household." These statements differ because minimum is not the same as reasonable and efficient, and outdoor use is excluded. From the justification for the 6ccf cut point in the bullet appears to make the use impact very small. In fact, this segment accounts for 16% of use for 29% of users who are supposed to be motivated by a 3% savings (about 1/2% of revenue).

It would appear that there is little difference in the tiers.

Investigating further, the rates do go up year-over-year, tier 1 increases at only 5.4% while tier 2 increases at 14.5%. Even at this rate difference, tier 2 only catches up to its present rate after 2017. At that time, there is still only about a 20% difference in the rates.

Between lower rates at the high-end, much higher rates at the low-end, and an empty promise of a tier structure, this does not look like an honest proposal for rate increases to cover costs.


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