City Council hikes water rates
–At Tuesday night’s Paso Robles City council meeting, the council voted to increase water service rates starting in January and begin notifying customers.
On Nov. 18, 2014 the city authorized the preparation and update of the city’s water and sewer rates and water facility charges. The analysis of water rates and facility charges found that the fund’s cash balance is lower than projected due to previous delays in adopting rates, overall community water conservation, and significantly lower water sales in response to the drought. Without a water rate increase, the fund would go broke by fiscal year 2022-23, according to the analysis.
Paso Robles owns and operates approximately 174 miles of waterlines, four storage facilities, and seven booster stations to distribute potable water throughout the city. A system of 20 wells and water from Lake Nacimiento supplies drinking water, with a surface water treatment plant soon to go into operation.
The Water Operations Fund as reported in the city’s “Comprehensive Annual Financial Report” operated at $12.1 million for FY 13-14 and has a projected total annual operating expense of $13 million for FY 15-16 with revenues generated primarily from user fees and water facility charges (also referred to as connection fees). Current revenues are approximately $9.6 million per year, thus falling short of meeting annual requirements.
Current water rates went into effect on January 1, 2012, with the last annual water rate increase scheduled to go into effect on Jan. 1, 2016. As of that date, all customers will pay $4.40 per hundred cubic feet (HCF) of metered water usage.
An initial fixed charge of $5 per account per month was authorized by the council. This fixed charge is designed to cover the current cost of utility billing and administration, a service provided by the water utility that is evenly shared amongst all users. The fixed charge is proposed to increase to $10 per account per month over a 5-year period to provide additional fixed cost coverage and a measure of stability.
Some members of the public expressed frustration that while the city’s constituents were cutting back on water use, rates were rising. The idea of a tier system was suggested, as well as a flat fee that would cover the entire cost of the water system. According to Public Works Director Dick McKinley, flat rates would have to be close to $75 per month per user to cover the entire cost, and it would be charged regardless of water use.
Councilman Fred Strong called the decision a, “no brainer,” considering that without a rate increase, the fund would go broke by 2022. Strong said that for decades, city council members have been, “kicking the can down the road,” in regards to unpopular decisions such as this one, and that recent city councils have begun to take action in making sure that the city remains financially solvent in the future.
The rate proposal is subject to a protest ballot process, according to City Manager Jim App. Customers/property owners have a minimum of 45 days to protest the proposed rates. If a majority protest, the rates may not be adopted/implements. Failing a majority protest, the council may adopt the rates and implement on the schedule included in the rate proposal (which includes a rate increase for each of the five years beginning January 2017).
The council approved the rate increases 5-0.