By David Buckingham
As we stated in this space in the Jan. 22 edition of The Bay News, “We must raise water rates or risk losing our state water supply.” In asking for your input on this discussion, we also noted that sewer rates must increase as well.
We recently concluded a professional water rate study, and while rates must not increase quite as badly as we feared they might have to, the planned hikes are still very significant.
Why are rates going up? I’d encourage you to review the more detailed discussion in our Jan. 22 column. For now though, here are the basic issues: 1) Water rates have not increased since 1995, and, 2) we must replace our 62-year old sewer plant. (The sewer plant was originally constructed in 1953 and last upgraded in 1983.) Here’s a key fact — adjusted for inflation, water charges i
n Morro Bay have dropped 36% over the last 20 years.
The accompanying graph shows both the problem and the needed solution. The flat blue line shows water rates, with zero increase, for a typical family over the past 20 years. The red line shows how rates would have increased gradually, if we had raised them based on the 2.5-percent average inflation rate and the 1% annual increased cost of water due to drought, regulation, and increases in operating expenses. The sharp blue increase shows the painful rate hike we must implement over the next five years to make up for our failure to raise rates gradually over the past two decades.
While rates always vary based on amount of usage, following is a brief example of how rates must change for a typical home. A typical family currently pays about $33 per month for water only. Based on the current plan, that will increase sharply to around $50 in 2016, and then go up more gradually over the next four years to reach around $75 in 2020. That is a total increase of about $42 per month over a 5-year period.
Thankfully, even with the new water reclamation facility, increases on the sewer side are not as dramatic as we anticipated.
This year, the sewer rate for a typical home is about $45. Based on our plan, that will increase to $55 next year, and then gradually increase to about $83 over the following four years.
So, an average family’s sewer bill will be about $38 more per month after 5 years.
One important note is the effect of the requirement to move the sewer plant. Had the City been able to build the new plant at the old site as originally planned, sewer rates would still have increased about $20 per month.
In order to build the new treatment plant, rates will increase an additional $18 per month. So, the total planned combined water and sewer bill increase will average around $80 a month for a typical family. Of that, about $42 is due to water increases, $20 is to replace the 62-year-old sewer plant, and $17 is due to the requirement to move the new sewer plant off the beach.
One important point of discussion for staff, Public Works Advisory Board and the City Council remains: that is how might we partially mitigate the effect of these tough increases on those with significant financial challenges.
While State law does not allow for individual discounts within the water and sewer enterprise funds, we are exploring options to provide some assistance to those hardest hit. One great idea was to provide all ratepayers the opportunity, on their water bill, to provide a couple extra dollars, or “round-up,” each month to contribute to an assistance fund for those on fixed incomes or otherwise financially challenged. We’ll explore this and other ideas in the months ahead.
The City Council will consider these rate increases again at its March 24 council meeting. Formal notification and details of the proposed increase will then be mailed to residents, prior to a final public hearing in late May. We anticipate these rate changes will go into effect in July.
As always, you can contact me at: , or Public Works Director Rob Livick, at: .
David Buckingham is the Morro Bay City Manager. This column is a regular feature of Tolosa Press.
