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City council approves utility rate increases
Sunnyvale pay rates will still be lower than surrounding cities
By Gretchen Knaup
The city council voted unanimously on April 23 to accept the public works department's 2001/2002 proposed utility rate plan. The plan would increase rates for water, sewage and refuse services,
Tim Kirby, revenue systems supervisor on Public Works, said, "The base effect of customers will be a $1.70 increase on the residential average monthly bills. Sunnyvale's rates are about one third of other cities."
Kirby said the plan's utility rate changes are recommended to continue to maintain high quality service, meet the obligations of state and federal environment requirements, and maintain the funds in a sound financial condition.
Before voting on this motion at the April 24 council meeting, Vice Mayor Fred Fowler said, "I know we are facing challenges on these fronts. We got a 30 per cent increase from one of our suppliers last year and we worked to accommodate that. I think [public works is] doing a great job."
As part of the city's yearly process of reviewing the financial aspects of out utility operations, the city council held a public hearing on April 24 to give citizens the opportunity to voice any complaints, or ask questions regarding the matter. Given the current energy crisis affecting the state, one might expect the council chambers to be brimming people wanting to share their concerns. Instead, council chambers were virtually empty.
Thanks to some astute planning, public works said Sunnyvale residents save an annual $360 per household in comparison to surrounding communities. Commercial customers also enjoy similar lower rates.
According to public work's resource allocation plan for the fiscal 2001 year, 75 percent of the Water Fund's expenditure budget is the cost of purchased water. The staff said it has factored in all known price increases and projects water usage over the next 10 years will optimize the use of the least expensive sources. Rates are dependent on the charges of wholesaler suppliers. Water rates from San Francisco Water Department are projected to increase 4.5 percent and Santa Clara Valley Water District rates are projected to increase by 7.9 percent. Sunnyvale's population comes into play through theory of supply and demand. The higher the population of the city, the greater the demand will be and hence the rates will go up accordingly.
According to public works, Sunnyvale water fees are based on a tiered model where higher volumes of water are charged at higher prices. "You pay what it costs the cities. We are only charging our residents what it costs us to provide this service," assured councilman Tim Rische.
The 2001/2002 plan reflects projected increases in recycled water revenues for 2004/2005, when the city expects more customers to use recycled water.
The background of the 2001/2002 plan states that in general, rate increases follow inflation in the economy. Other factors, such as water and fuel costs increasing faster than inflation, may speed up these rate increases.
The resource allocation plan also includes the refuse fund. According to the plan, this year's rates reflect an increase in the projected tons generated in Sunnyvale. The current plan is updated to reflect recent delivery history and anticipates an increase of 127,454 tons in the next fiscal year.
Rates also reflect an unusually high increase in inflation. In fact, Public Works says that the rate benefit of the decrease in the cost of operating the Smart Station is, to a degree, canceled out by the increase in refuse collection.
"Sunnyvale works to keep rates low through long term planning by making small increments," Kirby concluded. "We identify what our long-term needs are, and that enables us keep the rates down. The average residential increase is about three percent, which is less than bay area increases."
He added, "There is nothing negative that happened with the rate changes this year. Because we long term plan, we were ready for the increased prices in energy costs. We try our best to take it easy on our residents."
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Sunnyvale, California Since 1994
