North Tahoe PUD rate increases meet opposition
October 17, 2007
North Tahoe Public Utility District officials defended their proposed water and sewer fee increases at a public hearing Tuesday against frustrated ratepayers who said they couldn’t afford the steep hike they may soon see in their monthly utility bill.
“I look at every dollar that the PUD spends as my own dollar,” district board President Lane Lewis said at the hearing. “We’re here as your representation to operate this district in the most cost-effective way. That is the only pledge I can give you.”
Most of the public attendees said they acknowledged the need to maintain and upgrade the district’s sewer and water system that is only worsening over time. But they questioned whether such a single, dramatic increase in water and sewer rates was warranted.
The proposed rate structure, which would be effective December 1, would increase monthly water bills by more than 50 percent. Sewer bills would be more than doubled. And both sewer and water fees will see additional hikes, though much smaller in scale, in 2009 and again in 2010.
Most of the increase comes from a system replacement fee added onto the base service rate. The replacement fee will be earmarked to fund the district’s approved five-year capital improvement plan, which will update the sewer collection system, force main and pump stations, replace water lines, install additional water tanks and improve the district’s water treatment plant.
Current rate and fee structures do not have the capacity to fund the projects in the five-year plan authorized by the board, district staff said.
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“If you don’t replace line ” the cost is cheaper now than it is down the road,” Lewis said, also noting that the cost of a sewer spill will strain rate payers’ pocketbooks much more than maintaining the system. “The cost of the dollar increases. The cost of construction goes up as well. And if you don’t put something in the ground, you won’t have a system to maintain.”
Several attendees suggested the board spread out the projects along a broader timeline, which would lessen the financial stress placed on the rate payers.
“I think gradual treatment is much more palatable,” said North Tahoe resident Dave McClure.
Lewis said the district decided to adjust the rate structure once, rather than “piecemeal [residents] to death.”
The adjustment also includes a fee that will fund federal and state mandates the district is required to meet. But the mandates have yet to be enforced, McClure said.
“I just feel as though it’s jumping the gun,” McClure said. “That law is going to be changed or modified, I bet you, once it will be enforced.”
McClure suggested the rate increase should be implemented through meter fees, rather than a flat fee, to promote water conservation.
“This is definitely going to hurt people on fixed incomes the most,” McClure said.
Resident Ezra Meyer suggested the board prioritize water line replacement to discourage water leaks.
“Where they’re leaking the most is where we’re going,” Lewis responded. “It’s not necessarily just the Kings Beach grid.”
Residents also encouraged the board pursue other sources of funding, such as the Placer County Redevelopment Agency.
“You guys are the leaders of this district. We have to go after that money” from the Redevelopment Agency, McClure said. “Everybody else is. They’re all lobbying for it.”
The district has pursued that money, said Board Director John Bergmann. But the redevelopment agency has other priorities for it’s use.
“They will only [give the district financial assistance] in conjunction with their mission, which is to eliminate blight in a redevelopment zone,” Bergmann said, noting the agency said they would assist utility infrastructure development if their projects put additional strain on the system.
“This board has no more authority over [the redevelopment agency] than you do,” said Director Jeff Lanini. “Don’t act like we’re idiots here. We’re fighting the same battle. We’re on your side.”
The district also pursued low-interest loans, but did not qualify because their utility systems achieved a higher level of service.
“Any tax, any rate increase that we put on the public ” we’re not the enemies. We’re partners with the district,” Lanini said. “This is not taken lightly, and I want you to understand ” I want everybody to understand that we’re partners in this.”
The public hearing fulfilled proposition 218 requirements for public notification, district staff said. The proposition also states that if the district receives written protests by more than 50 percent of the property owners, the process must stop.
The district has received 24 “protest” letters to date, said Assistant General Manager Lee Schegg. Of those letters, 21 met the legal requirements and two did not outright oppose the fee adjustments.
The water and sewer rate increases come with structural adjustments to capacity and connection fees, which will mostly affect new development.