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Tahoe City PUD describes challenges as ‘perfect storm’

Nick Cruit
Sierra Sun

TAHOE CITY ” Representatives of the Tahoe City Public Utility District and Virginia Graham, a vocal opponent of the water and sewer rate increases, spoke about the proposed changes to the utility rates at the First Tuesday Breakfast Club meeting at Granlibakken Resort this week.

With the increase already approved by district directors and a Proposition 218 protest hearing fast approaching, rate payers have been exposed to an increasing amount of information from both sides in the last few months ” the opposition circulating protest letters against the increases, while the district has hosted public workshops and meetings to explain its need.

But while both sides can agree the antiquated water and sewer systems in Tahoe City need to be replaced, the main concern is how much the improvements are going to cost rate payers.

“If you start raising rates the town will suffer,” Graham said. “The systems are not going to fail overnight, so the improvements should be put off and we should focus on cutting costs right now,” she added.

Even Erik Henrikson, a member of the district’s board of directors, said the proposed rates would be burdensome.

“The rate increases seemed a little aggressive, but the need is real,” he said. “We need to figure out how to keep our system in good shape.”

And with water and sewer systems between 30 and 55 years old, district staff spoke with a sense of urgency.

Since recognizing the need for a rate increase of significant proportion four years ago, Cindy Gustafson, district General Manager, said there has been a “perfect storm” looming of the water and sewer systems, including: escalating construction costs; increasing mandates on the systems to bring them up to industry standards; declining wells needed to back up primary sources; the Angora and Washoe fires; and the aging infrastructure.

According to the district’s estimates of capital improvement plans needed over the next five years, there are 15 water projects at a cost of $15.2 million, and 35 sewer projects at $6.0 million, that need to be done. And that’s out of the 150 water and 60 sewer projects deemed necessary to bring the utilities up to mandated and industry standards.

But as Graham has repeatedly said, the district needs to look at cutting superfluous expenses from their budget instead of increasing rates; the community just can’t handle rate increases in such troubled economy.

“There are so many expenses that can be cut: birthday gifts, retirement cakes, Christmas parties,” she said. “They need to cut a little bit here and a little bit there because that’s what the rest of us are forced to do these days.”

But with such a large price tag attached to these projects, some rate payers believe such cuts would be ineffective.

“The savings from the list of things to be cut wouldn’t build a 200-foot water line,” said Walter Auerbach in response to Graham’s suggestions. “They’re insignificant.”

Graham wasn’t the only one to disagree with the increase, however. Some second home owners felt they should pay water and sewer bills like they do for garbage disposal ” homeowners pay for disposal only when a can is put out for collection, earning disposal credits when collection isn’t needed.

But with nearly 70 percent of the homes supplied by the district’s water and sewer systems owned by part-time residents, district staff and board members agree that the burden on full-time residents would be too great if rates were based solely on consumption.

“We need to be ready to serve the entire district 24-7-365, and second homeowners need to pay that base rate to ensure that service,” said Gustafson. “Half of the revenue comes from that flat base rate, and the other half is consumption.”

Under the current rate structure, that monthly base rate for a three-quarter inch service size ” standard residential water fixture ” is $43.76 with a $3.20 per 1,000 gallon charge in excess of 25,000 gallons. And under the proposed water rate structure, the monthly base rate ” effective April 1 if approved by rate payers ” for the same service size increases to $48 per month with a tiered consumption rate of $0.55 per 1,000 gallons for the first 8,000 gallons, $0.70 per 1,000 gallons for 8,001 ” 20,000 gallons, up to $1.95 per 1,000 gallons for 40,001 gallons and up.

Rate increases will not be effective if half-plus-one of the rate payers submit written protest letters to the district before the close of the public protest hearing on Feb. 25, which will be held at the district board room at 8:30 a.m.


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