Council considers city water rate hike following Wednesday public hearing

The Susanville City Council holds a regularly scheduled meeting at 4:30 p.m. Wednesday, Aug. 21 at the City Council Chambers, 66 N. Lassen St.

The meeting begins with a closed session at 4:30 p.m. — an evaluation of the city manager and a conference with labor negotiators from the administrative and management units.

The public portion of the meeting begins at 5 p.m. with employee recognitions, business from the floor (public comment) and the consent calendar (minues of the Aug. 7 meeting).

The council also will hold a public hearing to consider Resolution No. 24-6349 approving an increase in water rates beginning Oct. 1 and each year thereafter for the following four years.

According to the staff report prepared by Bob Godman, public works director, and consultant Dan Bergman, “The last rate study was done by city staff in September 2016. The result of that rate study and city council action was new rates in place January 2017 pursuant to Resolution No. 16-5339 on Dec. 7, 2016. Accordingly, those rates have been in place for the past seven years. T

“The city contracted with Dan Bergmann of IGService to conduct a rate study reviewing the financial status of the water enterprise, and to reset rates consistent with cost-of-service guidelines pursuant to California’s Proposition 218. The conclusions of the rate study were presented by Mr. Bergmann at the June 19, city council meeting, at which time city council approved issuance of a rate increase notice to all customers. The rate increase notice was mailed July 3, 2024, allowing 45 days prior to the rate hearing, pursuant to Proposition 218. The formal written report was completed June 28, and placed on the city’s website as stated in the rate increase notice, which is included in this staff report.

“The fiscal impact in the first full year is a projected revenue increase of $311,000, or 15 percent based on FY24 projected revenue. The fiscal impact in the second full year will be an additional $358,000 based on the additional 15 percent if it is fully needed. Assuming water sales do not increase and both 15 percent increases are implemented, the operating cash will become negative for FY25 and FY26, but then become positive and grow to $411,000 by FY29, the fifth year of the rate-setting period.

“Regarding compliance with the Series 2019 bond covenant to collect 25 percent more net revenue than the bond payment amounts, the bond covenant will still be met even during the years of operating cash loses. This is because the infrastructure surcharge revenue collected is counted as operating revenue, whereas the expenditures of infrastructure funds are classified primarily as capital improvements.”

Other items on the agenda include New Business (natural gas enterprise annual update, consider appointments to the Susanville Planning Commission, Resolution No. 24-6345 (authorizing a $5,315 agreement with Before the Movies for 30-second information advertisements at Sierra Theatre and Uptown Cinemas for the next 12 months), Resolution No. 24-6346 (authorizing the closure of Sunkist Drive for the Superhero Fun Run and Walk), Resolution No. l24-6347 (agreement with Stripe, Inc. to provide credit card paying through Solar App Plus for the city of Susanville), Resolution No. 24-6348 (a $73,675.30 agreement between the city and REY Engineers, Inc. for the design phase of the Southeast Gateway Project. According to the staff report, “Due to staffing shortages staff is not be able to complete some elements of the design/construction engineering work.”), Resolution No. 24-6349 (a $289,000 professional services agreement with REY  Engineers, Inc. for construction management, inspection and material testing services for the Southeast Gateway Project)), Continuing Business (a five-year moratorium on Public Facility Impact Fees. According to the staff report, “Public facility impact fees are levied on new development projects to fund capital improvements necessitated by new growth. These fees are used for various purposes including, but not limited to transportation infrastructure and public safety. Recent studies suggest that if we increase these fees without accompanying steady growth in the community, it could potentially deter development.” The fiscal impact is an expected loss of $77,000), the city manager’s report, department reports and future council items.

The council’s next regularly scheduled meeting will be held at 4:30 p.m. Sept. 4.

Click here to see the agenda.