Millbrae Council reviews water rate study proposing 7% increases for five years

In the heart of Millbrae's city hall, council members gathered on April 8, 2025, to discuss pressing issues affecting the community, with a spotlight on the city's water rates. As the evening unfolded, Finance Director Mike Sung introduced consultant Alex Handlers, who presented findings from a comprehensive water rate study, the first of its kind since 2017.

Handlers emphasized the urgency of the situation, noting that Millbrae's water infrastructure, which serves approximately 23,000 residents and over 500 businesses, is aging. Many facilities date back 50 to 80 years, necessitating significant investment to ensure safe and reliable service. The study revealed that current rates are insufficient to meet the city's capital improvement needs, which include replacing outdated pipelines and upgrading facilities like the La Prenda water tank, built in 1958.

The proposed solution? A series of 7% annual rate increases over the next five years. This increase aims to generate approximately $5 million annually for capital projects, addressing both immediate and long-term infrastructure needs. Handlers explained that while no one favors rate hikes, they are essential for maintaining the water system's integrity and avoiding larger increases in the future.

Council members expressed concerns about the proposed rate increase, with some suggesting a lower rate of 4% or 5%. However, Handlers cautioned that such reductions would delay necessary improvements and potentially lead to more significant increases later on. The discussion highlighted the delicate balance between affordability for residents and the financial health of the city's water system.

In addition to the rate increases, the council considered implementing a wholesale water rate pass-through, allowing for adjustments if the San Francisco Public Utility Commission raises its rates unexpectedly. This measure aims to protect the city's financial stability in the face of potential future droughts.

As the meeting concluded, the council set a timeline for further discussions, with a public hearing scheduled for June 10, 2025. This hearing will allow residents to voice their opinions on the proposed rate changes, a crucial step in the process of ensuring Millbrae's water system remains robust and reliable for years to come. The council's decisions in the coming months will shape the future of Millbrae's water services, reflecting the community's needs and priorities.