The City Council could start the process next week to raise water rates by as much as 81 percent over five years for the typical single-family residence as Modesto looks to shore up its water system revenues – which have fallen during the drought – and to pay for projects.
City staff is expected to ask the council at its Tuesday meeting to start the Proposition 218 process, which is the legal method required for local governments to raise water rates. The process would culminate with the council holding a public hearing Aug. 9. If the council approves the increases then, they would take effect Sept. 1.
The proposed increases are complicated as the city considers several scenarios because of the uncertainty caused by five years of drought in California. For instance, Modesto has what it calls drought and non-drought water rate increases. The drought increases call for the typical residential customer to pay about a couple of dollars less each month but for about 11 percent less water than under the non-drought rates.
Modesto Utilities Director Larry Parlin said both rate schemes are based on Modesto reducing its water use 25 percent compared with 2013 water use. He said the two rate schemes give the city flexibility and it could use the drought rates one year and the non-drought rates in another year based on such factors as groundwater and Sierra snowpack conditions, state regulations and the water system’s finances.
The proposed drought increases for a typical single-family residence call for monthly bills to start at $39.53 and rise to as much as $71.56 in five years, for an 81 percent increase. The proposed non-drought increases call for monthly bills to start at $41.77 and rise to as much as $73.81 in five years, for a 77 percent increase.
Both proposals call for steep increases the first year. They were designed that way to boost the water system’s revenues, which have plummeted as customers use less because of the drought and state-mandated conservation, which remains in place. Parlin has said the water system needs the rate increases to stay in compliance with the terms of the bonds it issued for water projects.
These rates increases are based on Modesto building $159 million in water system projects over the five years, which is what staff recommends. There is another option that calls for $131 million in projects and the rate increases for the typical single-family residence are slightly less.
Parlin emphasized the proposed rate increases are for the typical single-family home and the actual increases would vary based on use. Modesto’s other water customers – such as apartment buildings, businesses, restaurants and industrial users – also are facing steep increases.
Though the rate increases are for five years, the council each year would approve an annual increase. Parlin said it’s possible the council could approve an increase that is less than authorized or even no increase depending on such factors as the water supply and water system’s finance.
Still, the proposed rate increases are steep. A consultant’s report shows Modesto’s current typical single-family monthly bill is near the top third among 18 valley and foothill communities and the proposed rate increases would push Modesto closer to the top. But Parlin said Modesto, unlike many valley cities, relies on wells and river water. He said river water is more expensive than groundwater but having two water sources has been a boon for the city and helped sustain groundwater levels.
Proposition 218 gives those affected by the proposed increases the right to file protests with the city. If more than 50 percent protest, then Modesto cannot raise rates. If the council authorizes the Proposition 218 process Tuesday, the city would send out notices to property owners and ratepayers with information on how to protest. Parlin said the city will count only one protest per parcel, whether it comes from a ratepayer or property owner.
In other city news
I need to correct something I wrote last week about the city’s new smart phone app. It’s GoModesto! and not Go Modesto. It’s a lot easier to find on Google Play Store when you search for the app as one word. Users can do all kinds of things on the app, including sending in a photo to report problems, such as graffiti or illegal dumping.
Kevin Valine: 209-578-2316