A change in the way Menlo Park charges for water use that would result in a nearly 30 percent increase for the average residential user but a decrease for almost all commercial users is the subject of a public hearing when the City Council meets on Tuesday, July 21.
The proposed rate changes would affect residents in the Menlo Park Municipal Water District. While the average water user would pay about 30 percent more for water, the rates for higher users would rise by only slightly more than 9 percent.
Most commercial users would see their water bills go down, according to a consultant's report on the rate proposal.
The council meeting begins at 7 p.m. in the City Council Chambers, 701 Laurel St.
Also on the agenda are: approval of the proposed Economic Development Plan for the city; an amendment to the city's transportation guidelines for the M-2 zone; and a request to the Finance and Audit Committee to investigate how the city could save money by outsourcing services it provides, and how well it is doing with those services it already outsources.
The municipal water district covers 4,140 properties in Menlo Park. Most of the rest of the city is in the California Water Service Company's Bear Gulch District, which also recently raised its rates. Areas it serves include Sharon Heights, the SLAC National Accelerator Laboratory, the Willow Road corridor, Belle Haven and the M2 industrial zone.
The staff report on the proposed water rates says that two of the major factors in the rate increase are a huge increase in the cost of water to the city and a recent court case that says that tiered water rates are illegal unless the water provider clearly shows that the tiers correspond to costs of providing water.
The city is also planning some major capital projects to improve and repair the water system, which would add a surcharge to water bills, as would a proposal to charge more for water during a declared drought.
The lower tier includes only the minimum amount of indoor water needed monthly for the average family of 2.7 people, which is 600 cubic feet (6 CCF, or approximately 4,448 gallons). The staff report says this amount would be billed for at the cost of the water to the city. The second tier is everything above 600 cubic feet. The city previously had four tiers.
The water rate increases are based on a study by Bartle Wells Associates. The study shows that under the two-tier system that city staff has recommended, for low water users, who use 500 cubic feet (5 CCF, or approximately 3,740 gallons) of water a month, monthly rates would go up from the current $32.84 to $43.64, a 32.9 percent increase. About 24 percent of the city's customers fall in this category.
The totals in the Bartle Wells report do not include a proposed drought surcharge of $.29 per hundred cubic feet but do include the capital surcharge.
The Bartle Wells study shows that for the average user of 1,400 cubic feet of water each month (14 CCF, or about 10,472 gallons), the rate would go up from $70.49 per month to $90.99 per month (before the drought surcharge), a 29.1 percent increase. About 27 percent of the city's customers fall in this category.
For the above-average user of 2,500 cubic feet of water each month (25 CCF, or 18,700 gallons), the Bartle Wells study shows, the bill would go up from $120.54 to $149.01, a 23.6 percent increase. Slightly less than 37 percent of the city's users fall in this category.
The study shows high users of 4,000 cubic feet of water per month (40 CCF, or 29,920 gallons) would see their bill go from $209.04 to $228.14, a 9.1 percent increase. A little over 12 percent of the city's users are in this category.
The proposal is for five years; the staff report shows that rates would increase at smaller increments in future years for low, average and above-average users, but at higher rates for high users. Increases would range from a low of 9.5 percent for low users to 14.8 percent for high users over the four years.
The study also shows that for most commercial water users, rates would go down. Small businesses using only 1,500 cubic feet of water per month are the only commercial accounts that would see a first-year increase, according to the Bartle Wells study -- from $75.04 to $96.26 per month, a 28.3 percent increase.
A moderate-use restaurant, using 7,500 cubic feet of water, would have rates go down from $425.64 to $424.73 (a 0.2 percent decrease); a high-use restaurant using 20,000 cubic feet of water would have its bill go from $1,225.46 to $1,149.88, or a 6.2 percent decrease. A large irrigation user of 75,000 cubic feet of water would have the bill go down from $4,544.5 to $4,134.95, a 9 percent decrease; and a large industrial user of 200,000 cubic feet of water would have a bill reduced from $12,317.01 to $11,147.40, a 9.5 percent decrease.
All commercial users would see rate increases ranging from 12.4 percent to 15.7 percent in the next four years, however.
Rates could end up increasing even more over the five years, because the proposal includes a provision that would allow the city to raise the rates if its water costs increase. A 30-day notice would be required for such increases.
Menlo Park says that the amount it pays for water to the San Francisco Public Utilities Commission has doubled over the past five years, mostly because the SFPUC's $4.3 billion capital improvement project.
The SFPUC rates will go up 28 percent in the 2015-16 fiscal year and are projected to increase by 61 percent over the next five years.
The Menlo Park Municipal Water District plans nearly $7 million in capital improvement projects of its own over the next five years.