Turlock council explores raising water rates

mrowland@modbee.comAugust 28, 2013 

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— The results of a water rate study could mean much bigger bills for Turlock residents in the coming years.

The City Council heard a report on a potential new rate structure for residential and commercial users at its meeting Tuesday evening. The study, commissioned by the council in January, is the first step in possibly raising water prices for Turlockers to make up for cost increases and revenue deficits.

In the most costly rate scenario, average single-family homes could see their water bills jump to $96.25 a month in 10 years. Currently, single-family homes pay about $24.05 month.

Turlock receives 98 percent of its water revenue from its rates. Last year, the city dipped into its enterprise reserve fund to the tune of $560,000 to make up for revenue shortfalls. This year, it expects to use at least an additional $400,000 from reserves.

Groundwater depletion concerns

Still, city officials said just as pressing as the water revenue gap are its declining groundwater levels. Deputy Director of Turlock Municipal Services Michael Cooke said the city relies solely on groundwater for its system.

"From previous presentations and recent media coverage, we all know that the groundwater in our area is a diminishing resource," he said. "Pumping is exceeding recharge, and that's leading to a general decline in water levels. In the recent general plan, it was acknowledged that future growth and development would be somewhat contingent on finding an additional water supply."

Over the past three years, the city has lost two of its wells to water quality concerns, and two more are on the verge of exceeding the state and federal levels for arsenic.

The city has been investigating a long-term solution by building a surface water treatment plant to feed off the Tuolumne River. Turlock, Modesto and Ceres have created the Stanislaus Regional Water Authority to work on the project.

The water study, produced by Nevada-based Municipal Financial Services, offers two rate scenarios: one for groundwater only and one for groundwater plus surface water.

For the first two fiscal years, the rate increases or decreases proposed by the study are the same. Then in 2016, the groundwater-plus-surface-water rates shoot up significantly. The report lays out a 10-year snapshot of possible rates.

For average-use single-family home users, in 2023 the monthly rates would increase to $41.75 for groundwater only and $96.25 for groundwater plus surface water. Over that same time period, average commercial users could see rates jump from $104.50 to $146.80 for groundwater only and $337.40 for groundwater plus surface water.

"We don't want to sugarcoat it. The impact is going to be significant for all users. But we wanted to make sure we got it in front of the council and public in a clear and concise way," said Municipal Financial Services owner Tom Pavletic.

Turlock residents pay lower water rates than their neighbors in Modesto, Ceres and Merced. In 2011, the city switched from a flat rate of $31.50 per month for unlimited water to metered rate of currently about $24 for 15,000 gallons.

Under a possible groundwater-plus-surface-water scenario, the city would use much of its healthy $26.6 million enterprise water reserve fund to pay for the development and construction of the surface water treatment plant. The city currently is tapping the reserve to make up for the revenue gap.

Cooke said Turlock's costs for the treatment plant project would be about $86 million. A bond would have to be issued to pay for the capital project.

Council members discussed the 100-plus-page report at their meeting Tuesday night, but no action was taken.

Too soon to discuss project?

Councilwoman Amy Bublak said she felt discussion of rate increases based on a groundwater-plus-surface-water scenario were premature.

"I think we're putting the cart before the horse, and it's not fair to the citizens to go that way," she said.

But Councilman Forrest White said the time is now to begin the process of creating renewable water resources for the city's future. He said adopting the higher groundwater-plus-surface-water rate structure now did not preclude changing the rates if the project falls thorough.

"If we don't do anything, then the councils of the future will be sitting here going, pardon my English, 'What the hell were they thinking not to do surface water?' " he said. "Are we going to spend money for Turlock's future, not to make us look good today? ... We have to look at our children and will they have water."

Bee staff writer Marijke Rowland can be reached at mrowland@modbee.com or (209) 578-2284. Follow her on www.twitter.com/turlocknow.

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