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Public Hearing — Resolution Adjusting Water and Sewer Rates February 17, 2015 Page 2 In the past, Council has increased rates to keep up with the City's rising costs for water and power; Council last adopted an increase in 2011. The comprehensive rate adjustments under consideration will set water and sewer rates for the next five years and reflect the costs of providing water and sewer services and necessary investments in infrastructure improvements. The proposed rate adjustments are anticipated to generate $20.8 million in additional water revenue and $7.5 million in additional sewer revenue over the next five years. This additional revenue coupled with existing revenue levels and projected bond issuances will allow the City to proceed with the recommendations of the 2014 rate studies and invest approximately $67.7 million in water infrastructure improvements and $18.4 million in sewer infrastructure improvements in the next five years. Typical Customer Impact Water consumption is metered in hundreds of cubic feet (HCF), where 1 HCF equals 748 gallons. For a typical single- family residential customer using 15 HCF per month, it is estimated that the initial revenue adjustment would increase the monthly water bill by $0.99 from a current charge of $44.41 to $45.40, and the sewer charge would increase by $0.59 from the current charge of $5.18 to $5.76. This represents an increase of $1.58 per month based on a combined bill. After the initial adjustment, subsequent rate adjustments will occur annually effective July 1, 2015; July 1, 2016; July 1, 2017; and July 1, 2018. With the final rate adjustment on July 1, 2018, the City estimates that a typical single - family residential customer using 15 HCF per month will have a monthly water charge of $49.40 and sewer charge of $8.07. This represents a total increase of $7.88 per month on a combined bill after July 1, 2018. Public Hearing Notification As required by the provisions of Proposition 218, notices of a public hearing for adjusting water and sewer rates were mailed to all property owners within the City of Santa Ana water service area on or before December 30, 2014. The notice was also published in the Orange County Register on December 29, 2014, and December 31, 2014. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's Infrastructure, Objective #1 (establish and assets), Strategy H (complete water /waste — capture critical long -term capital needs). ENVIRONMENTAL IMPACT efforts to meet Goal #6 Community Facilities & maintain a Community Investment Plan for all City water rate study to ensure adequate resources to There is no environmental impact associated with this action. 75A -2