Palo Alto water customers could be in for a summertime soak of the financial kind, after the city’s Utilities Advisory Commission backed an 8% rate hike that would tack roughly $10 onto a typical monthly bill. The increase, if ultimately approved by the City Council, is slated to take effect in July. The recommendation now heads to the council’s Finance Committee and, barring changes, on to the full council for a final vote in June.
Why SFPUC costs matter
The San Francisco Public Utilities Commission has been raising wholesale Hetch Hetchy prices to help pay for its multi-year Water System Improvement Program, a roughly $4.8 billion capital plan to repair and seismically upgrade the regional supply, according to the SFPUC. Those wholesale charges get passed on to agencies that buy Hetch Hetchy water, and Palo Alto’s water financial plan notes that wholesale purchases make up about half of the city’s water costs, squeezing distribution budgets and reserves as wholesale debt service climbs, per the City of Palo Alto.
Commission seeks to soften the hit
Trying not to wallop ratepayers all at once, commissioners voted to shift less money into the utility’s reserve fund than staff had proposed and suggested delaying some distribution projects or holding vacancies rather than passing the full cost on to customers, the Palo Alto Daily Post reports. “It’s all over the map,” Commissioner Chris Tucher told the outlet, while Commission Chair Greg Scharff said there was not much the city could do when wholesale prices rise. Council liaison Ed Lauing told commissioners customers should not bear the cost if the city has “a bunch of cash sitting around,” the article said.
The recommendation now moves to the council’s Finance Committee for review and, if forwarded, to the full City Council for a vote in June, with any approved increase proposed to take effect in July. City documents outline the Proposition 218 notice and protest procedures that accompany utility rate proposals and show staff typically posts detailed financial materials and a public hearing schedule as part of the budget cycle, per the City of Palo Alto.
Regional reach
Palo Alto is one of about two dozen agencies that buy water from the SFPUC; the Bay Area Water Supply and Conservation Agency lists member agencies including Menlo Park, Redwood City, East Palo Alto and Mountain View. Those wholesale customers are watching SFPUC’s rate moves closely because wholesale bills and bond surcharges feed directly into local rate calculations, BAWSCA materials show…