In a split vote Tuesday night, the Calistoga city council moved to close the public hearing on potential water and sewer rate increases, while vowing to listen to community concerns about whether the rising cost of maintaining those utilities should be passed on to customers.
The council hasn’t made any decisions about water and sewer rates, and the 3-2 motion does not mean that rates will go up. It simply closes the time period in which the city is required to collect written protests from water and sewer customers, which if enough were received could prevent the city from raising rates.
City Manager Dylan Feik gave a 40-minute presentation that opened with a light-hearted introduction poking fun at the topic of wastewater – “Our number one is your number two” — and led into the more serious matter of how the city’s utility funds have reached a precarious financial situation. Some at the meeting referred it as the “sins” of previous councils who “kicked the can” down the road and did little to nothing to upgrade or maintain “underground” matters, such as the aging infrastructure today’s council is forced to tackle. Feik also said that costly litigation took money from the utility funds that would otherwise be used for much-needed infrastructure improvements.
The proposed utility rate increases were proposed through a water and wastewater rate study prepared by Bartle Wells Associations, an independent consultant. Customers were notified in November of the proposed rates, which would occur over a five-year period and are front-loaded to meet debt service requirements, Feik said.
Proposed water rates would increase in Fiscal Years 2018 through 2022 starting with 15 percent in the first year, then 14 percent, and 10 percent in each of the remaining years of the plan. Proposed wastewater increases follow the same time period starting with a 15 percent increase, followed by 13 percent, 10 percent in Fiscal Years 2020 and 2021, and end with a 3 percent increase in the last year.
Feik said the city is working on more ways to help low-income individuals and families make their payments. One program already in place follows PG&E’s California Alternate Rates for Energy (CARE) Program of giving qualified customers a 20 percent discount. The city does not require anyone to apply for the discount. They simply have to show that they are enrolled in CARE to qualify for the city discount. He said the council will be considering other programs or methods, such as rebates, to help people make their payments.
The council’s “fiduciary responsibility” is what brought Vice Mayor Michael Dunsford to propose closing the public hearing, which concluded the time period for formal written protests that would prevent the city from raising utility rates. His intention in doing so, he said, was to keep the control of setting rates in the hands of the city, not be handcuffed by the process, and come up with solutions on how to help low-income individuals and families through such avenues as community forums.
“The issue of previous councils going back 20 or 30 years was the fact they did not pass rate increases at the time. It’s not because we built a swimming pool that we are having this problem. The problem is that previous councils were pressured by the community to not increase rates and that is what created the lack of income to make the necessary infrastructure upgrades over time. So, we are paying that price now,” Dunsford said.
Dunsford proposed the motion to close the public hearing and Councilmember Irais Lopez-Ortega seconded it. Councilmember Gary Kraus joined them in the “aye” votes, with Mayor Chris Canning and Councilmember Jim Barnes voting “no”. A “no” vote would have allowed the public hearing to continue to a later date and in turn kept open the period of time the city was accepting protest letters.
The Community Center, where council meetings are held, was packed with attendees standing along the side and back walls, sitting on the brick hearth of the fireplace and spilling out an open door into the darkness outside.
Some speakers said they understood the reason and logic for the rate increases, thanking the council and city staff for tackling the touchy matter of rate hikes. Others pointed fingers and told the council to find the money from somewhere or someone else, and a couple of outbursts highlighted the delicacy of touching another person’s wallet.
“While I don’t like paying increases any more than anybody else does, I’m more interested in solvency and making sure that we pay what we need to pay … and I’m so sick and tired of having the can kicked down the road in other irresponsible government programs,” said John Feikema. “I think this is a good one for us to demonstrate true fiscal responsibility, pay what we need to pay, get it done, bite the bullet. I think the work that you are doing is great and support the proposals that are out there.”
Increases over the years “have squeezed at least 20 percent of our seniors who live only on Social Security to the point where they have no extra money to give,” said Larry Kromann, president of Calistoga Affordable Housing and a mobile home park resident himself.
A precedent-setting court ruling involving water rates in San Juan Capistrano also plays a part in the rate equation, calling for the justification of all costs and effectively eliminating tiered programs.
The rate increases will also help Feik seek lower-cost refinancing of the city’s debt service, he said, which in turn will save the community money and help with improving infrastructure. The city has long relied on the General Fund to subsidize the Enterprise Fund, which is not a sound practice to follow.
“I’ve tried no less than five times to refinance” the debt, Feik said.
The city has avoided improving some roads because the pipes underneath are old and need replacing, and would only need to be torn up again to replace the pipes. But the city does not have the money to replace the pipes because it is under orders from the state to comply with a Cease and Desist Order.
Calistoga could have been blocked from bumping the rates if a majority – 50 percent plus one vote – of parcel or property owners with a qualified meter submitted a formal written protest against the rate hikes. There are about 1,600 utility accounts, which amount to “votes,” and the city would have needed to receive about 800 formal protest letters to prevent the increases.
City Clerk Kathy Flamson collected 508 protest letters, some during Tuesday’s council meeting. Before the meeting started at 6 p.m. she said she had been able to vet about 250 as being valid. There were some duplications in that vetted batch, she said, and a few other disqualifiers, but regardless the total collected didn’t reach the number needed to block the process.
On Wednesday morning, Feik said they received at least three calls from residents who, after learning the reasons for the rate hikes, said they would like to pull their protest letters.
The four mobile home parks proved to be a sticking point with not only mobile home park residents, but with councilmembers and city staff. According to the law, individual mobile home park residents don’t all get to “vote” with protest letters. Since each park is on a single meter, each park gets only one vote, typically cast by the park owner. Owners pass on the costs of the meters to park residents.
Flamson said she didn’t receive any protest letters, or “votes,” from any mobile home park owners, but if there was even one protest letter from a resident within a park she considered that as the mobile home park owner’s vote, so each mobile home park was represented.
About one-third of Calistoga residents live in a mobile home park, Kromann said, and some of the speakers at Tuesday’s meeting voiced their appeal to be heard as individual utility payers and voters, but that is something the city council and staff are not in control of.
The city will hold a community forum on the subject on Wednesday, Jan. 10, in the Community Center starting at 6 p.m., and the rates will be discussed at the council’s next meeting on Tuesday, Jan. 16, also at 6 p.m. and in the Community Center. Mayor Chris Canning and one other councilmember will be at the community forum where the council will answer questions and listen to concerns and possible resolutions.