Council Approves Water Rate Increases

Whether you’re a homeowner or a business, get ready to pay more for both water and wastewater as soon as next month.

Last night, the council approved rate increases that average about 6 percent for water and 2.5 percent for wastewater for residents. Non-residential users will see spikes of about 5 percent for both water and wastewater, with 20-unit apartments and mobile homes seeing a decrease of about 1.3 percent.

The city says the rate hike is need to cover ongoing debt obligations for the Ellis Creek Water Treatment Facility, completed in 2009, as well as build up reserves for operations and equipment in years to come.

But two council members—Vice Mayor Mike Healy and Councilmember Mike Harris— voted down the plan, saying there was more the city could do to slash costs.

At Monday’s meeting, Healy presented a cost-savings plan that involved obtaining some of the city’s water from local wells instead of buying it all from the Sonoma County Water Agency (SCWA), which would save $1.3 million over five years, he said. He also proposed deferring maintenance on the downtown wastewater pump station.

Click on photo gallery on right to read Healy's proposed plan.

But others said they could not vote for a last-minute plan that hadn’t been double checked for accuracy and that time was running out. Teresa Barrett questioned the wisdom of relying on groundwater supplies, saying the city didn’t “know either the quality or quantity of the groundwater and could not count on it.”

Barrett called the rate spike a politically unpopular choice, but said the increases were the bare minimum, just enough to bring the city into compliance.

“We were elected to be fiscally responsible and not kick the can down the road,” she said. “We need to just suck it up and do it.”

Following the meeting Healy said he was disappointed in the vote, saying the council needed to "look under every rock to demonstrate that we're keeping rate hikes as low as possible."

"The amount of well pumping I was proposing is just maintaining the pumping level of the last two years, which hasn't caused any problems...(and) is permitted under the General Plan," he said.

Healy also added that he was concerned that the council's action could provoke a legal challenge or initiative similar last fall's wastewater referendum that would have rolled back rates to 2006 levels.

Mayor Dave Glass and Councilwoman Tiffany Renee said they worried about depending on rains to replenish the aquifer and said that if the city ran out of groundwater, it would have to pay even more to the SCWA to purchase extra. The SCWA gets its water from the Russian River.

Meanwhile, City Manager John Brown said he was concerned the city’s bond rating for repaying the wastewater facility would be downgraded, which would mean that interest rates on the project would increase. Brown said that Moody’s, the rating agency, had already downgraded one of Petaluma’s bond ratings because of concern that the city did not have enough money in its reserve fund.

The recommendation is for a city to have a 15 percent reserve cushion, while Petaluma had around 3 percent, according to the 2010 budget.

Still plenty of residents turned up to voice their frustration over rates that have steadily risen over the past four years, something they say makes living and doing business in Petaluma less desirable. Water rates increased 13 percent in 2009 and 9 percent last year.

Petaluma homeowner Rick Brown used to live in Newport Beach where he paid just $20 a month for water. Here, his bill is a whopping $200 a month.

“I have installed low-flow toilets and showers, put in drip irrigation, but I continue seeing my bill climb,” Brown said. “I use less water, but my rates keep going up, so there is really no incentive to save…Rates are going up year after year, including 9 percent last year. But how many people can say that they got a 9 percent raise in that time?”

Part of the plan is to continuously adjust rates every year, based on the Consumer Price Index and the city’s general financial situation. But because many people are struggling, including seniors and the disabled living on a fixed income, the city would help direct them to resources such as HUD and , said Remleh Scherzinger, the interim director of the Department of Water Resources and Conservation.

What do you think about the plan? Should the city have considered Healy's cost reductions proposal or is there another way to raise funds for infrastructure? Should we rely more on our own groundwater instead of buying water from the county? Sound off in the comments below.