Oakdale sewer rates may soar

10/31/2013 5:33 PM

10/31/2013 5:35 PM

Residents might soon pay sharply higher sewer rates so the city can pay back a $13 million loan for system improvements.

The City Council on Monday night will consider a series of rate hikes totaling about 50 percent over four years. A typical home’s monthly bill would reach $61.27 in July 2017, compared with $40.25 today.

Under state law, the council could not approve the proposal if a majority of the 7,000 or so customers file protests at or before Monday’s public hearing. Only 72 protests had been received as of late Thursday afternoon, City Manager Bryan Whitemyer said.

The council launched the rate increase process in July, following the rules set out in Proposition 218 of 1996.

The city also proposes small increases in water rates in 2016 and 2017 to reflect inflation, on top of already-approved rises in preceding years.

Oakdale borrowed the $13 million from the state to pay for improvements at its wastewater-treatment plant but has fallen short of the rate income needed to pay it back.

Last year, the council voted to pay just $324,697 of the $884,409 owed in the first installment on the loan. The money was owed to the State Water Resources Control Board, which agreed to restructure the payments if the city raised customer rates.

“If the city fails to pay in accordance to the modified payment schedule, such an action will constitute breach of contract,” an April letter from the board said. Its options at that point would include termination of the loan and immediate repayment.

The sewer system is separate from Oakdale’s general fund, which mainly pays for police and fire protection and has stresses of its own.

In a July memo to the council, Whitemyer said the main reason for the sewer shortfall is the rate structure. It is based in part on the volume of water used in winter, and when water rates increased, customers cut back on their use more than officials expected.

The proposed sewer rate structure would eliminate volume-based charges for residential customers, who instead would pay fixed fees each month. Businesses would continue to have volume charges as well as fixed fees.

The increases would be on top of a series of sewer hikes that started in 2009, when the typical customer had been paying $17 a month.

The city already is raising water rates under a schedule approved earlier. This includes 10 percent in July of this year, 8 percent next July and 5 percent in July 2015.

For a typical home with a 1-inch meter, the water bill is $20.56 a month and will be $23.32 in two years.

Under the latest proposal, the city would increase water rates based on the Consumer Price Index in 2016 and 2017. This is projected to be 2.42 percent each year, according to the California Department of Finance.

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