Pleasanton Weekly

Opinion - April 23, 2010

Proposed water/sewer rate increase makes sense

Nobody likes to see their water and sewer bill increase in a recession, especially those without jobs or whose salaries have been down-scaled. But the city of Pleasanton makes a strong case for hiking the bi-monthly residential fees, albeit by just an average of slightly over $10 for customers in Tier 2, the most common rate category for those who use 29,920 gallons of water - or 40 100-cubic-feet (Ccf) - over a 60-day billing period. Local water and sewer rates have not been adjusted since 2001, probably the only government fee that hasn't risen over the last nine years. Yet the cost from Zone 7, the city's water supplier, has increased during the same period by 55-1/4 percent. While the city has been able to absorb these increases over the years, not adjusting local water rates to reflect the increases in the cost of purchased water as well as inflation since 2001 is placing a significant strain on the city's water enterprise, which over the years has not been, nor should be, reliant on the General Fund to operate. Given that the General Fund, which is dependent largely on sales and property taxes, is also suffering declines in those revenue sources, the city can't afford to ignore deficits in its separately budgeted water and sewer system.

To ensure that both the water and sewer systems remain financially solvent and that appropriate reserves are in place to fund maintenance and replacement obligations, city staff and the City Council are eyeing an average residential increase of $10.40 per bi-monthly billing period starting Aug. 1. That will amount to a $5.40 increase per month. For some, with large homes and landscaped areas who are in Tier 3 using more than 75 Ccf, the bi-monthly cost will be higher, as it is now. Also subject to change is the 20 percent discount on water and sewer rates long given to those 62 and older and a 30 percent discount provided for low-income families who also qualify for PG&E, PacBell or cable television discounts through either the California Department of Economic Opportunity or the Social Security Administration. The costs of these discounts in 2009 were $330,260 for water and $326,634 for sewer for a total of $656,894. With the passage of Proposition 218, it is no longer possible for the rate payer or rate base to absorb the cost of these discounts and instead it must be borne by the city's General Fund or eliminated.

Unfortunately, according to Daniel Smith, the city's director of operations services, and Finance Director Dave Culver, the current economic situation does not allow the city's General Fund to absorb 100 percent of these discounts. Also, they point out the dollar amount of these discounts will only grow in the coming years due to the steady increase in the over-62 age group. Curiously, too, is a recent city audit that showed some of the city's highest consumers of water are those who take advantage of both the senior and low-income discounts. This calls into question the effectiveness of the discount program. In order to mitigate the impact of these discounts, the proposed new rate schedule will block customers from taking advantage of both discounts. They must opt for one or the other and they will qualify only if their bi-monthly usage is in the 40 Ccf second tier. Also, senior discounts will be restricted to those 65 and older, not 62, and only to seniors whose names are actually on the title of the property being served. By implementing all of these changes, the discounts will cost the city an estimated $345,000 a year, about half what it pays out of its General Fund now,

Those with larger landscaped properties that have 2-inch water meters will see much larger rate increases. A survey has been mailed to Pleasanton water and sewer customers. Except for the largest users, the rate increases seem nominal, reasonable and worthy of the public's support.

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