San Carlos’ approximately 11,000 sewer customers could see their rates rise over the next three years to fund ongoing operations and maintenance of the aging pipelines and replenish the city’s sewer fund reserves.
Even after this increase, city residents are looking at “more substantial” increases in coming years to meet a number of financial challenges to the city’s sewer enterprise fund, according to Public Works Director Jay Walter.
The issues include contributing approximately $64 million toward the South Bayside System Authority’s $420 million effort to rebuild its wastewater treatment plant. The city also has approximately $10 million worth of sewer system capacity improvements necessary over the next five years to prevent overflows and comply with the legal settlement reached with San Francisco Baykeepers. These costs were also addressed during last year’s increase hearing that ended with a 6 percent hike in rates.
City staff recommends a ramp down approach starting with 25 percent followed by 20 percent to 10 percent to let work start near immediately on improvements to the system. The City Council Monday night can also consider two alternatives, one of a 15 percent annual increase for three years and another for 12 percent annually for three years. Neither of the two other options will bring in all the funds needed but the 15 percent plan represents a “solid start” toward the goal, according to Walter’s report.
That alternative lets the city, among other things, fund approximately $5 million of the highest-priority master plan projects within the next five years without issuing new debt. The plan identifies at least $20 million worth of projects needed over the next 10 years.
Current monthly sewer charges of $53.10 are slightly below the $57.88 median of 23 regional agencies surveyed. In the first year of the recommended adjustment, the monthly rate would increase to $67.29 followed by $80.75 and $88.82 in years two and three. The 15 percent option would increase to $61.91 in the first year and the 12 percent option to $60.29.
On Monday, the council will consider authorizing a public hearing May 28 on the chosen increase. If 50 percent of ratepayers submit written protests by the close of the hearing, the city cannot implement the increases. If approved, the rates increased will take effect July 1 of each year beginning this year.
Walter also asks the City Council to look at changing the way hotels are charged for sewer service. San Carlos currently charges based on the number of rooms rather than volumetric rates and metered water use. The change would decrease sewer charges for hotels by about 45 percent.
The city could also adopt a new moderate strength commercial class for commercial users whose volume is higher than that of a standard customer but lower than those in the high strength category like restaurants. The city would gain about $20,000 by also changing the minimum annual charge to standard strength commercial customers. The charge would drop from 100 percent to 75 percent of the residential rate but be applied consistently to all non-residential accounts.
The San Carlos City Council meets 7 p.m. Monday, April 8 at City Hall, 600 Elm St., San Carlos. Written protests must be sent in a sealed envelope to Sewer Rates, City Clerk, City of San Carlos, 600 Elm St., San Carlos, CA 94070. Protests must identify the property by street address or assessor’s parcel number, identify the property owner(s) and be signed by one of the current property owners. For further questions, contact Public Works at 802-4204.