A significant rate hike proposal will go before Sacramento’s City Council next month with the support of a city advisory panel that heard from concerned residents for the second time Wednesday night.
The city plan would impose 10 percent increases for water and 9 percent for wastewater annually in each of the next four fiscal years. City officials say the rate hikes are needed largely to fund the installation of water meters in Sacramento, one of the last California cities in which many residents do not pay for water based on use.
The Utilities Rate Advisory Commission voted 4-1-1 to recommend that the City Council approve the rate increases proposed by the Sacramento Department of Utilities.
At the Jan. 27 hearing, commissioners asked the department if slowing down meter installation would allow the city to soften rate increases. But Susan Goodison, the department’s business services manager, said Wednesday that slower installation would cost an additional $28 million in management and materials and increase debt costs. She said it would cut water rate hikes by just 1 percentage point annually – to 9 percent – and require significant increases in the following years.
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Goodison said the water rate hikes couldn’t be reduced lower than 9 percent because the city wouldn’t have enough money to pay for all of the necessary upgrades.
City Manager John Shirey on Wednesday persuaded the commission to approve the rate increases as originally proposed. The city has ignored its infrastructure needs for decades, he said, and the bill has come due. And in the middle of a drought, water meters help control usage, he said.
“Water meters are key in order to be able to give everybody a sense about the resources they’re using and paying for,” he said. “We’re not out of a drought yet.”
Slowing the water meter installation would delay the point at which the city can switch to a tiered rate system, city utilities director Bill Busath told the commission.
About 70 percent of the city has meters installed at this point, according to the Utilities Department. In the first year after getting a meter, residents receive a comparative bill showing both the flat rate and the metered rate. After the first year, residents have to pay based on metered use.
If the meter installation continues as scheduled, Busath said the City Council could in 2018 consider charging tiered rates, a system used by nearly every other water provider in the area.
Under that system, residents pay more expensive rates once they reach higher tiers of consumption. Busath suggested that some customers could pay less with tiered rates than under the current system.
“If you’re on a fixed income, then this is a place where we can make a difference,” Busath said.
Commissioner Timothy Horner said he thinks the city has delayed infrastructure investment and water metering long enough, and that the time had come to make hard decisions.
“What I’m hearing is that slowing down the water meter installation is not going to solve our problem,” Horner said.
Commissioner April Butcher abstained from the vote and commission Chairwoman Carolyn Veal-Hunter voted “no.”
About 20 members of the public addressed the commission, many citing the burden of large rate increases on those with fixed incomes and allegations of mismanagement in the Utilities Department as reasons to reject the proposal.
Debra Desrosiers, with the watchdog group Eye on Sacramento, said she doesn’t buy the argument that meters need to go in as soon as possible to improve water conservation.
“People are saving water because we know we’re in a drought,” she said. “Not because we’re on meters so much as we know that’s what we need to do as a community.”
There was little discussion of the wastewater rate increase, which would raise the bill $12.23 a month for the average ratepayer by 2019. Sacramento currently has the highest wastewater rates in the region, according to a Bee survey of surrounding districts.
Busath said earlier this month that the main reason wastewater service is more expensive in Sacramento than in other communities is that about 40 percent of the city’s sewer system is owned and operated by Sacramento County, meaning there is a smaller customer base to draw on for upgrades to the city’s old and expensive system.
Under the city’s proposal, by July 2019 the typical single-family household would go from paying $68.15 to $98.60 for water and wastewater services each month, a nearly 45 percent jump.
Resident Susan Gedestad said she understands the need for infrastructure repair, “but in four years and trying to cram in things so quickly, I think that’s hugely unfair to the ratepayers.”