Tuesday, Aug. 30, 2016 • Council hosts water rate workshop

Publisher’s note: This story originally appeared in the Tuesday, Aug. 30, 2016, edition of the Lassen County Times.

The Susanville City Council met with residents for more than three hours to discuss a possible increase in water rates at a special meeting held Wednesday, Aug. 24.

Everyone at the meeting — councilmembers, staff and the public — seemed to agree an increase in water rates to fund improvements to the water system’s infrastructure is necessary, but the devil in the details was how exactly to accomplish that task.

The council approved a water rate hike in June that left the base rate unchanged (in deference to senior citizens and those on fixed incomes) and reduced the old five-tier system to just two tiers (irrigation season and non-irrigation season) and included a drought surcharge, but the council rescinded that action Aug. 17 after some water users complained their bills nearly doubled. The increase was expected to fund $4.1 million in water infrastructure repairs and replacements over the next five years. About 80 percent of the city’s water system is aging steel pipe that is being replaced with a durable plastic pipe.

Councilmember Joe Franco continued his criticism that the council’s error in this process was that it never considered how the rate increase would affect customer’s bills, and he asked staff to compile that information.

“I want to make sure we do it right and the public has plenty of time to comment on it,” Franco said.

He also noted the water department’s revenue dropped because residents used less water due to the drought and conservation efforts, and he feared if the drought continues and the rates rise, the water department could be caught in a downward spiral of less usage and less revenue.

He said he wants more time to review the information, and he’s not in a hurry to adopt a new rate.

City administrative officer Jared Hancock said the new rate was imposed during irrigation season when rates were the highest (except for a drought declaration), but over the entire year a customer’s bill would only go up about 40 percent. He pointed out water usage declines significantly during the winter months.

The council directed staff prepare the information based on a reduction in the capital improvements from $4.1 million to about $3.5 million, including improvements on Main Street before it is repaved and possible grant funding. With grants, the ratepayer’s contribution could fall to $2.7 million.

The council directed staff to prepare information on two rate options — one with no change to the base rate with a $15 per month surcharge ($180 per year) for all customers and another with no change to the base rate but an increase based upon usage.

“Based on those two options, we will then provide multiple scenarios” based on a spectrum of user levels “the public and the council can chew on to see how they would affect them,” said Hancock.

“Don’t make it too complicated so even I can understand it,” said councilmember Rod De Boer.

Mayor Kathie Garnier asked Hancock about the projects that were being removed from the capital improvement plan.

“That will allow us to start making a dent in the infrastructure,” Hancock said. “We’re talking a hundred years of unfunded depreciation and lines that are deteriorating, many of them steel lines.”

Hancock also agreed the city needs to be upfront with the public, and said the information would be available for the public on the city’s website prior to the next meeting, Wednesday, Sept. 7. Hancock thought the information could be available by Sept. 3.

“This is not the ultimate fix,” Hancock said. “This is staying ahead of the worst areas.”

Dan Newton, the city’s public works director will have to produce a new rate analysis document upon which the new rate increase is based, and the city will have to notify customers who have a 45-day period to comment or protest prior to the adoption of any new rate.

When asked for his reaction to the council’s direction, Newton said, “Something’s better than nothing.”

Former councilmember Nick McBride expressed his concern with the council’s decision to rescind the rate structure adopted in June. He said Newton, staff and the council worked hard to prepare for that increase.

McBride, who led the meeting where the rate increase was approved as mayor pro tem, wondered how the three councilmembers who attended that meeting could approve the rate increase he thought needed a 4/5 vote. He said legal counsel advised him that a 3-0 vote by those members present met that legal threshold.

Former mayor Kurt Bonham said the agenda for meeting in which the council rescinded the rate increase was misleading because it said the council would discuss the matter. He said the public should have been informed the council might take action, and it was not.

“If you’re going to take action, say you’re going to take action,” Bonham said.

Bonham also asked if the council’s decision to rescind its previous action to raise the rates wasn’t imposing a new rate, subject to the public notification process and 45-day notice.

Hancock said the 45-day notice requirement is not necessary when reducing the rates.

In addition, Bonham said when the council approved the last increase in water rates in 2008, those funds were restricted to infrastructure projects, and he asked how that money had been spent.

Bonham also noted what the city is calling depreciation in its documents is actually capital improvements. He said the city has never funded depreciation before.

Hancock said that funding had been used for infrastructure improvements and the new smart water meters. City staff said there is currently about $200,000 in the water system’s capital improvement fund.

Members of the public who have been asked to conserve water and then received the increase in their water bills also questioned the use of water at the city’s parks, which one resident called the greenest areas in the city.

Responding to a question from the public, Hancock also said the water department is not funding the new swimming pool. He said the city’s contribution to the pool comes from the general fund and not from the water department.