North Tahoe ponders large sewer, water fee increases
The North Tahoe Public Utility board of directors stopped short of voting to increase sewer and water fees at a meeting last week, but directed staff to return with a modified rate package.
Faced with aging infrastructure and strained water capacity limits, the district is in dire need of an upgraded water and sewer system, but additional funds are needed to pay for infrastructure improvements. Rising costs for construction and materials further exacerbate the situation.
Action to improve the water and sewer systems is inevitable, said Lane Lewis, the board president. If the district does not start seeking a solution now, the required work would be more expensive in the future, he said.
At Tuesday’s meeting, district staff recommended the board raise the water connection fee for hooking into the system from the current $4,112 rate to $5,500 for a single-family residential unit. The rate would be prorated for larger developments.
Staff recommended raising the $2,000 sewer connection fee to $2,920, an adjustment of 46 percent.
A new water-capacity fee of $8,394 per unit was recommended for development beyond single-family units. The capacity fee would help pay for new infrastructure to support the project. Under the staff proposal, a sewer-capacity fee would not be implemented.
The district’s finance committee has been studying sewer and water rates for more than a year.
After delving into the issue for two hours, the board did not adopt any of the proposed new fees. Instead, they directed district staff to assemble a comprehensive package that will simultaneously look at increased connection fees and user-rates, as well as the new water-capacity fee.
“We have to raise a certain amount of capital for capital improvement projects,” said Lewis. “Some can come off rates, some can come off connection fees, some off capacity fees. … We really should be looking at it as a whole.”
Leah Kaufman, a land-use planner and Tahoe Vista resident, said she thinks the public needs to be aware of the proposed fee hikes.
“From my perspective, I’m happy that the board postponed [the decision] because it allows the public a chance to digest what the increased fees mean,” Kaufman said.
The district’s water system and pipelines, which the district inherited over the years from private developers, are nearing the end of their useful lives, said General Manager Steve Rogers. And during the peak summer months of July and August, water demand meets production capacity.
“In July and August, we are producing and distributing the water in a continuous fashion,” Rogers said. “Not much storage capacity.”
The systems were built for the peak demand of summer months, Lewis said. If that peak demand becomes the standard throughout the year, or if a fire emergency occurred in the middle of August, the district would be strained to meet the demand because the stored water would be drained to a critically low level, he said.
“That’s a number-one area of concern, so that we can keep everybody in good shape during the peak seasons,” Lewis said.
The board is looking to replace 3,200 linear feet of water pipeline per year, with an annual budget of $800,000. An escalated fee rate would be incorporated into the budget to account for inflation.
Another water storage facility is also in the works, and the board is prepared to finance the $4.5 million venture, Lewis said.
Sewer infrastructure projects are not as critical as water projects, said board Director Sue Daniels, but sewer pumps and backup generators are likely projects.
Rogers said grant funding for sewer system improvements is more likely because of the system’s proximity to Lake Tahoe and the threat a potential spill poses to the lake.
The board is facing a decision that requires balance and equity, Lewis said.
Increased fees, especially capacity fees, are needed to cover infrastructure costs for development. Lewis said he thought the developer should shoulder the additional financial responsibility for increasing the use of their property.
“The fee shouldn’t be borne by the public,” Lewis said.
At the same time, the fees need to be equitable and not stymie development.
“We do want people to fix things up, we do want improvements and we want to keep the cost affordable,” Daniels said.
The board will host workshops to receive public comment on the fee adjustments. Rate changes require additional public processes beyond that required for connection and capacity fee adjustments.
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