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Politics & Government

Foster City Leaders Vote to Raise Water Rates by 30 Percent

City Council approves rate increase amidst struggle to balance budget.

Foster City residents soon could see the rate on their water bill jump by 30 percent under an tentative agreement made by city leaders on Monday.

Council members said their decision to hike residents' rates was compelled by a 41 percent increase in the city's bill from the San Francisco Public Utilities Commission. The commission delivers water to Foster City from Hetch Hetchy Reservoir in Yosemite National Park.

The water rate agreement was made in a special budget meeting while council members were working as the Estero Municipal Improvement District. Official approval will require another vote and a public hearing beforehand.

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The SFPUC is paying a third of the cost of a $4.6 billion improvement to the Hetch Hetchy water transportation system. The commission shoulders its share of the rehabilitation cost and purchases the water, then sells it to smaller Bay Area markets. 

Now that cost has been passed on to residents of the cities paying to use the transported water.

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According to Foster City Finance Director Steve Toler, the city's wholesale water purchase price increased from $1.90 per unit to $2.70 per unit.

Under the new rates, citizens will pay about $2.74 per unit.

"This shouldn't be a surprise," said Councilman Rick Wykoff. "We did everything we could and we were very responsible about it."

Wykoff said the rates may continue to increase over the duration of construction. Water rates could eventually double for those living in cities that purchase water from the commission.

City Manager Jim Hardy said the costs being passed on to Foster City may be higher than initially anticipated because the restoration work is happening faster than planned.

"These are legitimate costs they are passing on," said Hardy. "It's just a little earlier than expected."

Hardy said this year's 40 percent increase should be the most substantial of any future rate hikes.

Wykoff said rehabilitation costs to the transportation system are coming in lower than expected, which could mean water rates will not increase as much as anticipated.

The water rate hike

Budget discussions will continue through May, as the council prepares to approve its funding for the upcoming fiscal year.

Council members are currently working to balance a projected $5 million deficit without spending any of the Foster City's $17 million in reserves. 

The council on Monday also ranked priorities for the city's five year financial plan and set a 10-year approach to future spending.

Council members also looked at cutting costs by reducing cell phone use for city employees and finding better prices for tables and chairs, among other things.

The council will take up further discussions zeroing in on potential revenue sources and cost savings at another budget session in May.

Council members should pass their budget for next year by June.

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