Water and sewer rates in Calistoga will rise next year due to unavoidable consequences of costs, capital projects and regulations, officials said Tuesday, but by how much and when is not yet set.
“There’s not an option, there’s going to be a rate increase coming along,” said Councilmember Gary Kraus at Tuesday’s city council meeting.
Rate increases recommended by Bartle Wells Associates, a company hired by the city to do a comprehensive water and wastewater study, were reviewed by the council Tuesday and will be taken into consideration in future meetings that will include public hearings, officials said.
Notices in English and Spanish will be mailed to rate payers to inform them of the increases and their option to protest. If more than 50 percent of affected parcels submit written protests the council cannot go forward with the increases, according to the Proposition 218 process. Consequently if fewer than 50 percent submit written protests the council can move forward with the increases.
In a five-year plan rates for water will increase 15 percent in 2018, 14 percent in 2019, and 10 percent in each of the subsequent three years. Increases for wastewater are dependent on securing a grant, but in the worst case scenario costs will rise 15 percent in 2018, 13 percent in 2019, 10 percent in 2020 and 2021, and 3 percent in 2022. If the city receives a $3 million Riverside Pond and Headworks Grant rate payers will still see a front loaded increase of 15 percent next year, but the following years’ increases aren’t as high. Starting in 2019 rates would jump 8 percent, then 5 percent in 2020 and 3 percent the final two years of the rate structure.
City Manager Dylan Feik said in an interview that the city plans to mitigate the effect of the increases on low income residents whenever possible and hopes to increase the programs that help low income rate payers pay their water and sewer bills.
Doug Dove, president of Bartle Wells, which conducted the analysis and gave the presentation to the council Tuesday, said the current rate structure is insufficient to fund the city’s responsibilities that include replacing aging infrastructure, addressing mandated improvements driven by a 2016 Cease and Desist order, and meeting debt service obligations.
Based on a groundbreaking legal case Dove called the “San Juan Capistrano” case, municipalities cannot charge utility costs in multiple tiers without justification. Calistoga currently has multiple tiers, but Dove recommended moving to a single tier payment program because Calistoga’s two water sources – Kimball Reservoir and NBA (North Bay Aqueduct) – complicate the formula making it too challenging to justify more than one tier.
Dove also recommended a change in the structure of payment in fixed rates – the minimum that rate payers are charged – and volume, or use, charges. He proposed modifying the structure to 40 percent, from 32 percent, of charges to come from the fixed rates and dropping to 60 percent from 68 percent the volume charges. The adjustment would create a more stable structure for the water and wastewater budget because the volume charges vary with seasons.
Feik pointed out that without one-time fees charged to hotel projects – Calistoga Hills Resort and Silver Rose – all the rates would be even higher, and Calistoga Hills paid for infrastructure improvements that the city would otherwise have shouldered the entire cost.
The rate hikes are within the range of neighboring cities, Dove said, with some cities such as St. Helena charging more than Calistoga in both water and sewer fees.
The city will announce public hearing dates at a later time.