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Publication Date: Friday, June 08, 2001

Preliminary approval for water, sewage rate hikes Preliminary approval for water, sewage rate hikes (June 08, 2001)

Final council vote slated for June 14

By Justin Scheck

The City Council Tuesday gave initial approval to next year's proposed budget, including rate increases for water and wastewater services.

According to the city's proposed budget, the San Francisco Water District (SFWD), which provides 88.5 percent of the city's water, and the Santa Clara Valley Water District (SCVWD), which provides 9.3 percent of the city's water, will increase their water rates for next year.

The city's narrative budget report states, "Although it would be possible to forego a rate increase for the next fiscal year, staff is recommending a 3.0 percent rate adjustment... to incrementally increase rates for next fiscal year in order to mitigate larger increases in future years."

The council decided to hold off the increases until midway through next fiscal year, which starts July 1, in order to give people time to adjust to electrical rate increases, said Council member Ralph Faravelli at the meeting.

Council member Rosemary Stasek said Wednesday that the rate increases are necessary "to keep the water fund solvent."

Mayor Mario Ambra and Council member Matt Pear voted against the rate increase. Ambra suggested a "one-year moratorium on rate increases," despite city staff's assertion that increases over the next few years will be necessary to meet SFWD's rate hikes.

Patty Kong, the city's assistant finance director, said Wednesday that if the city does not increases charges to citizens as the rates the city pays for water go up, the water fund would end up operating at a deficit, and would have to deplete its emergency reserves.

Stasek said that not increasing the rates would force the city to use public money to pay for residents' water. "That's when the public is subsidizing people who use a lot of water," said Stasek.

The water fund has emergency reserves of approximately $5 million, although the council Tuesday gave preliminary approval to a capital improvement plan that allocates another $4 million of reserve money for expanding the city's water storage capacity.

Pear and Ambra approved the capital improvement plan, which would make $4 million in reserve funds unavailable to offset rate increases from SFWD and SCVWD. Neither responded to requests for comment.

The budget also suggests a 4 percent increase in wastewater rates to account for lower-than-expected wastewater revenues projections for next year.


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