Health & Fitness
Millbrae Water & Sewer Rates Could be Lowered
Water and sewer rates should be scrubbed.
Mayor Quigg's closing comment on the water rates discussion at the May 24th Council meeting was on point. He noted that the fixed part of the rate, that is Water Service, should not need to be increased every year or often or so much. Certainly not as much as the SFPUC water rates.
That is because this part of the rate is set in principle to pay for the relatively fixed costs to deliver water. These costs are independent of SFPUC charges for the water. We know the SFPUC rates have and will increase considerably.
It is unfortunate that the City's consultant set the rate model to increase the Water Service charge the same amount the variable Water Usage rate increased every time. This is not consistent with rate setting principles and logic.
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The same thing was done for the Sewer Service rate. In the sewer case many costs depend on the quantity of sewage flow and other costs are relatively fixed.
What has happen because of the past and projected increases in the Water Service and Sewer Service rates that went along with the increases in the variable rates, is that these service rates have most likely increased well above what is needed to cover the related and relevant fixed costs.
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Certainly we have not increased and will not increase the labor costs and other non-flow and non-SFPUC costs by 7%, 7%, 6%, 6% and 6% since FY 09-10 for water and the 37% since 2008 for sewer, even considering capital projects. If we have, something is out of line.
This is one reason the City Council is getting complaints about the rates. Council should have staff scrub the Water and Sewer Service rates to show how they are or are not in line with the related relatively fixed costs as compared to the flow related costs. It is likely possible that Council could lower these parts of the total utility bill and not affect the operation of the water or sewer funds. This should be possible before the rates increase this July as scheduled for water. Any relief would help the rate payers and be fair and reasonable. And, I do not think Council would have to do a Prop 218 action to lower any rate.
As a matter of interests when the City used in-house rate models, the noted principle was applied and addressed the costs independently.
