Fiscal Year 2017-18 Sewer Rate Increase FAQ
The City has a 100% volumetric-based rate structure, which is based on water use. With the drought-induced decline in water consumption in the past two years, sewer revenues have also declined. Revenue has been approximately 24% lower than projected. This shortfall means that the City is not bringing in the revenue necessary to stay on track to improve, operate, and maintain the wastewater system.
This reduction in revenue also comes at a time when the City is facing the financial needs of a large capital improvement program to rebuild the wastewater treatment plant and make major upgrades to the sewer collection system to meet State regulatory requirements. The proposed 36% increase to the base rate for fiscal year 2017-18 will establish sufficient revenue to overcome the shortfall and provide reliable future revenue for financing the major capital improvements.
Specifically, the proposed rate adjustments will enable the City to:
- Fund capital investments and debt service for high-priority capital needs in Fiscal Year 2017-18. These high-priority capital projects include improvements to the sewer collection system and the wastewater treatment plant (WWTP), including annual sewer rehabilitation, capacity, and reliability improvements and projects at the WWTP to ensure responsive and functional facilities.
- Respond to increased regulatory requirements and issues associated with sanitary sewer overflow prevention, including construction of relief sewer lines and facilities necessary to prevent overflows during heavy rains, as well as increased cleaning, inspection, and rehabilitation of the existing collection system.
- Pay for the increases in annual operating and maintenance expense required to meet the City’s regulatory permit requirements, fund increasing annual debt service requirements, and keep revenues aligned with the costs of providing wastewater service.
Not completing the capital improvements will lead to the City failing to comply with the Regional Water Quality Control Board’s Cease and Desist Order and the National Pollutant Discharge Elimination System permit requirements. Not meeting these regulatory requirements and mandated deadlines could result in large ﬁnes that will be passed on to ratepayers. Our infrastructure will continue to deteriorate and will continue to have failures, such as sanitary sewer overflows that leak diluted raw sewage onto the streets and pollutants into the City’s creeks, beaches, lagoon, and San Francisco Bay. Sanitary sewer overflows are significant health concerns that negatively impact the community and the environment.
The sewer utility is a self-supporting enterprise that relies mostly on sewer service charges to fund the costs of providing service. The City has provided financial stewardship by gradually raising sewer rates to keep rates in line with annual revenue requirements. Revenue is used to fund operating expenses, maintenance, rehabilitation, and capital improvement projects. The Clean Water Program is funded by sewer use fees paid by all properties and neighboring jurisdictions (Town of Hillsborough, Crystal Springs County Sanitation District, County of San Mateo, and City of Foster City) that tie into the sewer collection system and send flows to the treatment plant. All users and contributors to the wastewater system pay their fair share of the costs.
The Clean Water Program is a $900 million capital improvement program that will be constructed over the next several years.
The City is seeking grants, low-interest loans, and other financing mechanisms to minimize impacts on sewer rates. The City is aggressively pursuing sizeable State Revolving Fund loans for a majority of the program costs.
The City’s current residential sewer rate is $9.05 per hundred cubic feet (CCF) of billed usage. With a 36% increase, the residential rate increases to $12.31 per CCF. For reference purposes, 1 CCF equals 748 gallons. Any rate increase would be applied across the board to the residential and commercial rate classes, plus the minimum charge as well.
Yes, the commercial rates will go up by 36%, as well. The City levies volumetric commercial sewer rates that vary by customer class and wastewater strength, with higher rates charged to customer classes with higher-strength wastewater. Higher-strength wastewater contains higher concentrations of “contaminants” that cost more to treat to permitted levels prior to disposal. The City has four commercial rate classes. All sewer accounts, including commercial accounts, are subject to a minimum charge, which will increase from $22.62 to $30.78 per month. Commercial sewer rates are currently 100% volumetric, with no fixed charge component. However, the minimum charge does ensure all accounts pay at least a minimum amount toward the City’s fixed operating costs even if they have very low usage.
There are two components needed to calculate your sewer bill. The first component is the sewer “rate,” which is determined by the City determination of revenue requirements needed to improve, operate, and maintain the wastewater system. The second component is “usage.”
Your average monthly usage for the entire year is determined based on your average monthly winter water usage for the five preceding winter months (November through March). These five months are used as the basis because water use during these wetter, winter months excludes most outdoor landscape irrigation and more accurately reflects actual wastewater discharge.
Your monthly sewer service charge is calculated by multiplying the sewer rate for your customer class, by your average monthly usage. To determine your annual sewer charge, you multiply your average monthly sewer charge by the 12 months of the year. An example is provided below.
* 1 CCF = 100 cubic feet, or 748 gallons
Annual Sewer Charge = Rate X Average Monthly Use X 12 Months
Using the example data above, the steps to calculate the annual charge for a “Class A Standard” residence are as follows:
1. To calculate your average monthly winter water use, take the total water consumption (25 CCF) and divide it by the 5 winter months:
25 CCF total winter water usage ÷ 5 months = 5 CCF average monthly water usage
2. Calculate the monthly fee by multiplying your average monthly water usage by the Class A rate:
5 CCF average monthly usage x $12.31 per CCF = $61.55 per month
(For commercial businesses, use the rate for your customer class, which reflects the cost of treating different strengths of wastewater.)
3. Next, calculate your annual sewer service charge by multiplying the monthly sewer charge by the 12 months of the year:
$61.55 per month x 12 months = $738.60 annual sewer service charge
Note: The proposed minimum charge for Fiscal Year 2017/18 is $30.78 per month. This minimum charge will apply if there is any water use during the fiscal year.
As illustrated in the following chart, the monthly sewer service charge for a typical home with 5 hundred cubic feet (CCF) of average monthly winter water use is currently $45.25. With the proposed 36% increase, the typical monthly charge would increase to $61.65.
Households with lower-than-average water use--for example, those with 3 CCF of average winter water use--currently pay $27.25 monthly and will see their bills increase to $36.93 per month.
The City’s sewer service charges for a typical home are low compared to other regional agencies. In particular, low-use customers pay substantially less in San Mateo than they do in other surrounding communities. With the proposed rate increase, the City’s sewer charges for a typical home are projected to remain in the lower-middle range, and sewer charges for low-use customers will remain low compared to other regional agencies.
The chart below shows today’s rate compared with the rate after the proposed increase. The City’s monthly sewer charge for a typical single family home is at the low end of the range compared to 22 regional sewer agencies. Even with the 36% rate increase, San Mateo will be in the middle of the rates relative to those charged by the surrounding communities. The sewer fee data from the other agencies shown in the chart reflects their current rates for the last fiscal year. Note that many of these agencies are also undergoing rate increase processes, and those future charges are not reflected in this chart. When other agencies raise their rates, San Mateo’s rates will again be relatively lower than most surrounding communities.
In Fiscal Year 2015-16, rates were increased by 10%. Last year (2016-17), the rates were raised by 12%. Due to water conservation efforts, many customers have reduced their water usage, resulting in a total reduction in sewer service charges of 24% over the past two fiscal years. Because of this decrease in billed usage, sewer rate revenues have decreased despite the sewer rate increases over the past two years. It is important to note that on average, while rates went up, sewer bills have remained virtually the same for customers who have conserved because their billed usage has decreased.
If the rates are adopted by the Council in June, they would go into effect 30 days later and be applied to Fiscal Year 2017/18 beginning July 1, 2017. The City’s sewer charges are billed on the County’s property tax bill, which is typically distributed by the County in October each year.
Because your sewer rates are linked to your water use, conserving water in your home is one way to keep your sewer bill down. Unlike some communities where sewer bills are paid as a flat fee, the City of San Mateo’s sewer bill is currently 100% volumetric. This means the more you use, the more you pay. Although the City does not sell water directly to users, the City supports water conservation efforts by all rate payers. CalWater, one of the primary water providers in the area, has resources and a webpage on conservation tips you might find useful. The link to their Conservation Efforts page is https://www.calwater.com/conservation/.
Public outreach and transparency are important components of the City and the Clean Water Program. The City of San Mateo Public Works Department hosts community meetings and reaches out to neighborhood and community organizations when important topics that affect the community need to be communicated. In addition, the program’s website, CleanWaterProgramSanMateo.org, has numerous project documents, presentations, and videos posted to inform and educate the community.
When new information or meeting invitations need to be communicated to the public, the Clean Water Program distributes information via first-class mailers, email notification (sign up on the Clean Water Program website), social media posts (via NextDoor, Facebook, Twitter), website updates, association newsletters, City Calendar updates, and/or press releases. The press releases allow the City to engage with local media sources, such as the San Mateo Daily Journal, to share topics related to the City’s Clean Water Program.
With the current 100% volumetric sewer charge structure, sewer charges are greatly affected by the unpredictability of average winter water usage. Ideally, sewer rate increases should result in proportional raises in sewer service charges and recovered revenue. If the average usage continues to decline, the actual revenue recovered will continue to be short of the target revenue needs, as has been the case over the past few years. An example of the effects of continued decrease in usage and the impacts to sewer bills is provided below. Although rates were increased, the sewer bills, which provide the City revenue to fund the improvements, operations, and maintenance of the wastewater system, essentially decreased in this example.
To improve the predictability and stability of future revenue recovery, the City is evaluating a move toward a more predictable rate structure, such as a hybrid structure that continues to have a volumetric-based fee but introduces a fixed-fee component.
The City’s sewer collection and treatment system works to serve all residents of the City and, as a whole, to meet regulatory requirements. The sewage from any new development is conveyed to the wastewater treatment plant within this overall sewer system. The City operates and maintains the overall sewer system, which includes newer sewer lines that are constructed in new developments. The sewage from these developments goes though the same overall conveyance system, which is currently impacted by a Cease and Desist Order from the Water Board for sanitary sewer overflows during wet weather. The Water Board makes no distinction of location in the negative issues affecting the conveyance system. Likewise, the WWTP is currently impacted by a requirement to eliminate blending of partially treated wastewater during wet weather events through the City’s NPDES discharge permit. Any flow that enters the sewer system contributes to the entirety of the system and is not seen nor treated any differently. So, no one person or area is exempt from making improvements to the entirety of the system as it operates as one for the good of all.
Capital needs vary from time to time and place to place within the system, and all property owners in the City’s sewer collection systems have paid for the system’s maintenance in common in the past, and will continue to do so in the future. We expect this to even out over time so that property owners who arguably “benefit” from the system-wide rate structure now will be “burdened” later, when their segment of the system does not need repairs but other segments do. Furthermore, a system-wide rate structure provides greater transparency and ease of administration over a rate structure based on near-term maintenance needs.
Clean Water Program FAQs
The Clean Water Program is a comprehensive plan to upgrade San Mateo’s wastewater collection system and wastewater treatment plant to provide reliable service for years to come. The wastewater treatment plant is owned by the Cities of San Mateo and Foster City/Estero Municipal Improvement District. The wastewater treatment plant also serves Crystal Springs County Sanitation District, a portion of unincorporated San Mateo County, and the southern portion of the Town of Hillsborough. Those services are paid for by partner agency reimbursements.
The Clean Water Program is intended to meet the following goals:
- To replace aging pipes and facilities. Sewer pipes have an average lifespan of 50-60 years, and most of San Mateo’s sewer pipes were constructed between 1900 and 1960. The wastewater treatment plant has many components that are over 75 years old, and nearly half of the system is reaching the end of its useful life. Although it has been maintained and upgraded over the years, improvements to meet current and future operating requirements are needed.
- To meet current and future regulatory requirements and increase system capacity during heavy rains. The regulatory environment that protects our community continues to change. We are responding to the current direction of regulators (the Regional Water Quality Control Board) that require speciﬁc corrective actions to prevent sewer overflows during heavy rains, while planning for future regulations related to the quality of our treated wastewater.
- To align with long-term sustainability goals. Improvements to the wastewater treatment plant and sewer collection system will protect public health and the health of San Francisco Bay. The higher-quality water will become a source of recycled water that can be reused for landscaping and other uses. Additionally, the solid waste can be turned into an alternative fuel source for City vehicles.
In San Mateo, wastewater from homes and businesses is collected via a system of pipes (sewer laterals and mains) and pump stations. The collection system includes about 234 miles of pipelines, more than 5,500 manholes, and 26 pump stations. The collection system transports the wastewater to the treatment plant. There, it undergoes a series of biological and physical treatment processes so that it is suitable for discharge into the San Francisco Bay. The plant treats an average of 12 million gallons per day during summer months; during heavy rains, the plant can receive up to 8 times greater than the average normal flows.
Because the system does not have the capacity to treat the extra wastewater during heavy rains, sometimes sanitary sewer overflows (SSOs) occur. An SSO is the result of high volumes of rainwater mixing with sewage and exceeding the system’s capacity to transport and treat it. The Regional Water Quality Control Board has issued the City with a Cease and Desist Order for SSOs.
Failure to meet our permit obligations (i.e., treating the discharged water to an acceptable quality) and Regional Water Quality Control Board requirements (e.g., preventing sewer overflows) by mandated deadlines could result in large ﬁnes that will be passed on to ratepayers.
The program is funded by sewer use fees paid by all properties that tie into the sewer collection system. The City is seeking grants and low-interest loans to finance the capital improvements needed, while minimizing the impacts on sewer rates.
In-System Storage FAQ
The 2014 Integrated Wastewater Master Plan and the 2016 certified Programmatic Environmental Impact Report (PEIR) identified a total of 55 alternatives, based on properties with potential sufficient space for the facility. These included municipal properties, schools, undeveloped property, private property, and parking lots. The PEIR also indicated a shortlist of 12 alternatives based on hydraulic modeling and beneficial impacts on addressing the City’s sanitary sewer overflow (SSO) issues.
The shortlisted alternatives were then evaluated based on hydraulics, constructability, right-of-way, contractor laydown, parking, and storage capacity. This technical analysis identified five alternatives to transition into an Alternatives Analysis that evaluated each alternative against non-economic criteria (technical, social, and environmental) and economic criteria (construction cost, operation and maintenance cost, easement and usage fee costs, and life-cycle costs). The non-economic criteria score and cost were determined for each site and a relative comparison of pros and cons was completed. Seventeen meetings with the public were conducted between August through December 2016, including Community Open House meetings, Public Works Commission, Parks & Recreation Commission, and meetings with several homeowner associations to discuss the process, purpose, gather community input, and identify key issues. The feedback received at these meetings was incorporated into the Alternatives Analysis.
The results of the Alternatives Analysis were presented to the Public Works Commission in December 2016 and to the City Council in January 2017. The Commission and the Council screened the five alternatives and identified 1) the Corporation Yard and 2) San Mateo County Event Center as their preferred two alternatives to progress to the next steps of design and to be further evaluated for potential impacts.
The two preferred alternatives’ conceptual layouts were optimized for each site, required permanent and temporary construction easements were determined, and site restoration requirements were identified. A Phase 1 Environmental Site Assessment and CEQA initial studies were also performed, and the construction schedule and cost estimate for each site was also updated.
Staff will present the latest alternatives evaluation to the Public Works Commission on June 2017, to request for their recommended final selection. Staff will then present the same evaluations, plus the recommendation of the Commission, to the City Council in July 2017, and request direction from Council on the final in-system storage facility site selection to proceed through final design.
The potential locations have been narrowed down to two sites: the San Mateo County Expo Center and the City Corporation Yard. Recommendations for the final site selection are being prepared and will be presented to the City Council in July 2017.
San Mateo does not currently have an underground storage facility; however, Daly City does, and Pacifica is planning to construct one. These storage facilities are becoming more widely used across the entire country as a means of providing additional capacity in the system during heavy rains to help prevent sanitary sewer overflows (SSOs).
The storage facility must be able to contain approximately 5.2 million gallons. The two alternative sites have different constraints that will affect the design and dimensions of the facility.
Approximate plan dimensions for the San Mateo County Event Center tank are 210 feet by 150 feet. Approximate plan dimensions for the Corporation Yard tank are 230 feet by 140 feet.
Once the site selection process is complete, these approximate dimensions will change and detailed dimensioning of the facility will be defined as the design progresses.
The Programmatic Environmental Impact Report (PEIR) contains summaries of potential environmental impacts. During construction, the impacts will be traffic, dust, noise, and vibration. Impact mitigation measures will be implemented during construction. Once constructed, the storage facility will help the City comply with the Regional Water Quality Control Board’s Cease and Desist Order to eliminate sanitary sewer overflows to the Bay and thus will improve water quality (a beneficial impact). Once construction is complete, the site will be restored to its previous condition with potential enhancements to surface improvements. Additional environmental investigations will begin when a location alternative is selected by City Council in July 2017. This information will be shared with the public prior to construction.
The underground storage facility is designed to temporarily store wastewater only during peak wet weather events (heavy rains), and the wastewater that is stored in the facility is diluted with rain water. The diluted wastewater will be held, typically for no more than approximately 24 hours, until the storm passes and the downstream collection system and the treatment plant have sufficient capacity to accept more flows. Upon release of the stored diluted wastewater, the storage facility will utilize self-cleaning mechanisms to flush and clean the facility, all while odor control is in effect.
The new plant will treat the wastewater to higher treatment levels of quality that meet state requirements (Title 22) so it can potentially be reused for irrigation purposes. The City is exploring partnership options to treat the effluent to a higher level of quality for potential indirect potable recycled water use.
The final design is required and will meet seismic safety thresholds and standard building codes. The facility will be designed to withstand the U.S. Geological Survey (USGS) seismic acceleration of 1.9 g, which is specific to San Mateo. The design will also comply with governing codes, such as Reinforced Concrete ACI 350, California Building Code 2013, and Design Loads for Buildings and Other Structures (ASCE 7-10).
Two of the earlier identified alternatives were City Park facilities that were potentially feasible due to their space and proximity to the Delaware Street corridor, where most of the sewer overflows occur. However, these sites were eliminated from consideration in response to public input and further analysis. The two sites selected by City Council for further evaluation of impacts are the San Mateo County Event Center and City Corporation Yard.
Taxes are not used to pay for this facility or any of the City’s sewer projects. The Clean Water Program is funded by sewer fees paid by property owners in San Mateo and through cost-sharing contributions from partner agencies, including the City of Foster City, Town of Hillsborough, County of San Mateo, and Crystal Springs County Sanitation District. The City is also applying for Clean Water State Revolving Fund low interest rate loans to minimize the impact of this multi-year capital improvement program on sewer rates. The City is proposing increases in sewer rates to provide the revenue required to pay for the Clean Water Program.
Several communication channels are used to inform the public of new information and upcoming meetings. These channels include mailing of community meeting invitations, sending invitations to City Council and Boards/Commissions, and updating the City’s events calendar and Clean Water Program website. Additionally, the City emails residents, Homeowners Associations, and other community groups; posts to social media sites, such as NextDoor, Facebook, Twitter, and YouTube; and distributes press releases to various media contacts. The Program will continue to send community information through these channels, and the City encourages the public to subscribe to the email list and to NextDoor.com to stay up to date with City and Program activities.
The underground storage project is part of the Basins 2 & 3 Collection System Improvements Project. This project includes the underground in-system storage facility, several sewer pipe projects, and pump station rehabilitation/upgrade projects. The total cost of this project is estimated to be a $154 million capital investment.
The two alternative sites have different site constraints and conditions that will affect the final cost of the underground storage facility. Initial cost estimates are being completed for the two alternatives as part of the alternatives analysis process that is happening now. Once the selection process is complete, a detailed cost estimate for the final selected site will be developed.
Geotechnical soil investigations will be completed as part of the design. Construction of the facility will require excavation of the soil and shoring will be utilized to maintain the integrity of the excavation. The foundation for the facility will likely require piers to support it.
In 2009, the San Francisco Bay Regional Water Quality Control Board (RWQCB) issued a Cease & Desist Order to the City mandating the elimination of sanitary sewer overflows and provide capacity assurance. The permit that allows us to discharge treated water to the San Francisco Bay (which is the Environmental Protection Agency’s 2013 National Pollutant Discharge Elimination Service [NPDES]) requires us to eliminate blending and use an integrated approach to collect and treat the wastewater.
The underground storage facility will allow us to temporarily divert excess volumes of wet weather wastewater flows (during heavy rains) until the capacity of both the collection system and the wastewater treatment plant can accept the stored diluted wastewater for appropriate conveyance and treatment. This will allow the City of San Mateo to comply with the RWQCB’s and EPA’s regulations.