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THE CITY OF /1 <br /> CITY COUNCIL AGENDA REPORT 2 <br /> pL£ASANTONe <br /> October 20, 2009 <br /> City Manager <br /> TITLE: LETTER TO ZONE 7 REGARDING PROPOSED WATER RATE <br /> INCREASE AS OF JANUARY 1, 2010 <br /> SUMMARY <br /> City staff was informed several months ago that Zone 7, the City's water wholesaler, <br /> was proposing to increase wholesale water rates to the City and the other Tri- Valley <br /> water retailers by 9.25% effective January 1, 2010. Staff has been working with the <br /> Zone 7 staff and the other Tri Valley water retailers to understand the need for the water <br /> rate increase and to try and find ways to defer, defray, reduce or eliminate the need for <br /> the increase. Unfortunately, staff has not been successful in their efforts and therefore is <br /> recommending that Council send a letter to the Zone 7 Board of Directors requesting <br /> that the Board forego a rate increase this year and utilize reserves and /or expenditure <br /> reductions as necessary to balance the budget. The proposed letter is attached <br /> (Attachment A). <br /> RECOMMENDATION <br /> Council approve Staff's recommendation to send a letter to the Zone 7 Board of <br /> Directors requesting that they forego the proposed 9.25% water rate increase to be <br /> effective January 1, 2010 and instead utilize existing reserves and /or expenditure <br /> reductions to balance their budget for FY2010. <br /> FINANCIAL STATEMENT <br /> The proposed Zone 7 water rate increase of 9.25% effective January 1, 2010 will result <br /> in an estimated $6.34 increase in the average water customer's bi- monthly water bill. <br />