Palo Alto's water rates would spike by 25 percent for the average residential customer if the City Council approves the latest proposal from the Utility Department tonight (Monday).
The new rates would increase the water bills for the largest residential customers by 28.6 percent, from $190 to $244. Residential customers in the medium category would see a 25.4 percent jump, while the smallest customers would see a 10 percent increase.
Staff is proposing an average rate increase of 21 percent for all customers. This would add $18.31 to the average residential bill and $31.55 to the bill of the average medium commercial customer.
According to a report from the Utilities Department, the city already has some of the highest water bills in the area. While Menlo Park's monthly residential bill is about 14 percent higher than Palo Alto's, Redwood City, Mountain View and Santa Clara all have much lower rates. The average residential customer in surrounding cities pays about 14 percent less than the average Palo Alto customer, the report states.
The reasons for the higher bills include Palo Alto's older infrastructure, higher rent payments of use of real estate in the service territory and lack of access to cheaper water supply, the report states.
The new rates are expected to add $3.4 million in revenues to the city's water utility, which has a projected $6.2 million shortfall in the current fiscal year, according to a report from Ipek Connolly, a senior resources planner in the Utilities Department. The balance of the deficit would come from the reserves.
The city's water supply costs are projected to increase by 37 percent this year and to double by 2016, largely because of the major infrastructure project. Palo Alto is one of 27 municipalities that draws its water from the Hetch Hetchy system.
The council meeting will begin at 6 p.m. tonight in the Council Chambers at City Hall (250 Hamilton Ave.).
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