Noting the economic hardship many residents are facing amid the pandemic, San Bruno officials agreed to push off raising rates for water and sewer charges.
The San Bruno City Council unanimously agreed to reverse course on a previous decision hiking utility charges by 5% to residents, noting that rates have increased consistently for the better part of a decade.
The decision comes as officials are advancing toward raising stormwater rates, which they claim is a necessary step in generating sufficient revenue for fixing an old and broken system.
Ultimately, councilmembers hoped the savings from the water and sewer rate decision would offset the expected cost of increasing the stormwater payments for the city’s residents.
“This is definitely the right time to take a pause in raising our water and sewer rates,” said Vice Mayor Marty Medina. “I’m definitely in favor of that.”
The deferral amends a decision in 2017 to annually increase the sewer and water rates by 5% over a five-year term. That decision followed a similar, previous decision around 2012.
When weighing the proposed deferral, officials were comforted that the enterprise funds fed by the rate revenue were healthy enough that they could withstand going one year without additional income.
To that end, the water fund is projected to be worth $13.4 million in the 2021-22 fiscal year, amounting to $6.2 million more than the targeted reserve of $7.2 million. Similarly, the wastewater fund is expected to carry $17.1 million, or $9.6 million more than the $7.5 million reserve target.
“We will not be hurting our financial solvency in these two enterprises to delay or cancel the rate increase,” said City Manager Jovan Grogan.
Officials acknowledged that the rates would need to be reconsidered the following year.
The forgiveness lands just as councilmembers laid the groundwork for hiking stormwater rates by a proposed 234% — which would drive the average bill from about $46 annually to $154. The existing rate has been in place since 1994, and does not generate nearly enough money to sustain an antiquated network, said officials.
The city has about $30 million in a stormwater capital improvement plan that cannot be addressed by a fund that operates at a deficit, officials have said. The system is estimated to be 120 years old, and recently has struggled to accommodate the increased demand brought with population growth. The need for fixes are becoming more frequent, system breaks are occurring and safety as well as budget threats are becoming more severe, said officials.
Because the rate hike would be paid through the annual property tax bill, city officials must begin a Proposition 218 process of calling a mail-in election, which will allow landowners to protest the increases. So long as a majority of the residents do not oppose the hikes, councilmembers could adopt a resolution approving the increases in July.
Noting the timing of the rate adjustments, Mayor Rico Medina said he believes it makes sense to offer some relief during a challenging period economically for many San Bruno residents.
Further regarding utilities in San Bruno, officials examined the bill itself and the notice residents receive to pay their fees.
Noting concerns raised by utility customers regarding how much they are being billed on a bimonthly basis, Grogan detailed the reasons why some might experience some sticker shock.
San Bruno is unique among its neighboring communities because it compiles three different utilities — trash, sewer and water — and bills residents every other month for those services.
While the rate for each individual service is comparable to other cities, Grogan acknowledged that bills may appear higher in San Bruno because of the format.
“Part of the reason is because we are doing the billing and all on the city’s letterhead and we do it bimonthly which gives the appearance it is a larger bill than just issuing monthly statements,” he said.
For context, he said residents in other cities may pay three different bills to three different agencies monthly. And while those rates are near what San Bruno residents face, the distribution may make the sum feel less burdensome.
Grogan noted that San Bruno residents do have the opportunity to pay their bills on a monthly plan. But the city saves about $31,000 annually by printing and sending paper notices every other month.
Looking ahead, he said officials want to encourage residents to sign up for online payments which will allow them to more closely manage their accounts and help the city save the costs associated with sending out printed mailers.
Additionally, Councilman Tom Hamilton said the city could do a better job clearly presenting the costs to ratepayers, which would address some of the concerns regarding billing.
“There is all kind of room for improvement here,” he said.