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Water Rates On The Rise?
Gaining Ground
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Riverbank residents, commercial and industrial users will all be paying more for water and sewer service in the coming years if a plan approved by the city council earlier this month survives the protest process and becomes part of the 2015-16 budget.

Passed in 1996, Prop 218 amended the California Constitution which, as it relates to assessments, requires the local government to have to ask affected property owners for any proposed new or increased assessment before it could be levied. If enough ratepayers protest the proposed increases, the city must put the issue to a public vote before it raises the rates.

The water fund last received an increase in July 2010, tied to increases in the Consumer Price Index. At its May 12 meeting, the council learned that no official rate studies have been performed in more than 15 years. And the sewer rate has not been increased since 2008, also following hikes in the CPI. Riverbank Mayor Richard O’Brien has blamed the severity of currently needed rate increases on inaction by previous city councils.

An earlier council had considered raising rates in 2010 and 2011, the staff report said, but the adjustments were not approved.

At the May 12, 2015 meeting, following a presentation on the new Sewer and Water Rate Study, the initial raise in rates was proposed to be phased in over five budget years. At that meeting, the council asked that an alternative be devised where the early increase would have less impact on users.

At its June 9 meeting, the council heard a second proposal that would set rates at a smaller increase over the first two years. Over the coming five years in total, however, both water and sewer will double.


Water Rates

The original proposal showed a typical ratepayers water bill, at a base of 1,000 gallons of water usage per month, go up from $14.65 this year to $27.07 by 2020.

This sample water rate would go up by $5.12 next year, $2.97 the following year, $1.82 the next, then $1.22 after that, finally $1.29 in 2020.

The June 9 proposal would see similar increases with the changes coming from phasing in a drought surcharge over the five years, with none imposed next year.

To make these adjustments, staff has eliminated some of the planned Capital Improvement Projects (scheduled repair and maintenance) in the department, and delayed others.


Sewer Rates

Similar adjustments were made to the proposed increases in the sewer rates. Back in May, the first increase would be 40 percent, and again the next year, then 14 percent, 3 percent and 3 percent for the 2019-20 budget year, with a typical user paying $20.15 now and up to $47.77 in five years.

Last week, the council received a revision in the proposed rate changes that would still meet loan payback requirements from Fiscal Year 2017 to FY 2020 in the Sewer Enterprise Fund. To lower the year-to-year increases, the finance department proposes eliminating several Capital Improvement Projects from the original plan.

The revised proposal jumps rates only 28 percent for next year, then 28 percent again, then 22 percent, 17 percent and just 5 percent in the fifth year.

A typical monthly charge would rise from about $20 now to almost $50 by the fifth year.

The city council voted 5-0 to move forward with the revised proposals, accounting for the doubling overall but with less impact in the first year of the increases.

The council has scheduled a Public Hearing to discuss these multi-year water and sewer rate increases on Tuesday, Aug. 11, 2015. Notices of the hearing will be published and mailed directly to ratepayers and will include the rationale for the proposed rate hikes.