PUD pondering more rate hikes
More rate increases are being discussed by the Truckee Donner Public Utility District, just months after the board imposed 5 percent hikes on both water and electricity.
At tonight’s utility district board meeting, the board will consider scheduling a public input meeting in two weeks regarding a proposal to increase water rates by an addition 6 percent in 2007 and by another 6 percent in 2008.
The rates would be split each year, with half of the funds flowing toward general operating costs, and the other half sitting as a reserve.
“I am hoping that that is the only rate increase we see for 2007 and 2008, though I just can’t say for sure,” said utility district General Manager Peter Holzmeister.
The proposal wasn’t part of the 2006 budget, according board member Pat Sutton, but was addressed about six weeks ago following a report that recommended increasing rates in order to finance more than $26 million in bonds for water system improvements and repairs, and to fund projects that are already underway.
When presenting and explaining the 2005 budget, Holzmeister said such repairs and replacements would be necessary, but numbers for the projects had not yet been crunched. Now it seems that all the money is needed at once, he said.
“It’s too expensive to do it in increments,” Holzmeister said. “The pipeline downtown is under construction and will be finished by October, so I have to pay that guy. The Donner Lake project will be completed this summer, so I need the money to pay that guy. And we have to refinance now while the interest rate is right.”
The utility district is about to ask for some long-term financing for those capital improvement projects, Holzmeister said, and has been advised by the district’s financial analyst that money lenders need to see a stronger cash reserve position.
“Rate increases would demonstrate to the finance world that we are serious about improving our financial position,” he said.
But some residents and board members think that funding $27 million in certificates of participation is too much too fast.
“For 20 years they’ve lived without a reserve problem, and now they want to solve it in two weeks,” said Geoff Stephens, general manager of the Glenshire/Devonshire Residents Association.
The board is scheduled to vote today to have a public hearing on June 5, and following that, the board will vote on the rate increases.
“The public is strong, but if no one says anything, it’s going to go through,” said board member Bill Thomason. “It’s so much money, and it’s almost too stealthy in my mind.”