American Canyon leaders will take a serious look at raising water rates this year, which would put the city in line with other communities in the Napa Valley that have recently upped their rates, or are thinking of doing so.
Public works officials and members of the City Council have indicated American Canyon’s water charges need to go up to pay for ongoing expenses that aren’t being covered by current revenues and to finance investments in the city’s aging water infrastructure.
Similar arguments were raised in neighboring cities and upvalley when Napa and St. Helena each decided late last year to charge their customers more for water services.
In early November the Napa City Council approved a series of rate hikes through 2022 that included a new baseline charge for all water bills for homeowners and business owners regardless of how much water they use.
Under Napa’s plan, a household that uses about 5,000 gallons a month will see their bill increase from $28 to $35 next year, and on to $47 by 2022. Bills for customers consuming only 2,000 gallons a month will double from $11 to $22 in 2018 and eventually reach $33 in five years, according to the Napa Valley Register.
As of Dec. 1, all Napa customers will be billed a base charge that starts at $28.59 every two months for residences connected to a ¾-inch pipe and goes up for larger water lines. The baseline will increase each year for four years – to $33.02 in 2018, $38.16 in 2019, $42.95 in 2020 and $48.58 in 2021.
In St. Helena, the City Council approved a series of water and wastewater rate hikes in late November — only a year after adopting a rate hike in 2016 that provoked considerable criticism from residents.
Under the 2017 plan, the average summer water bill for a single-family home will increase from $147 a month to $165 and $193 in 2022, compared with $172 and $219 under the previously adopted rates, according to the St. Helena Star.
The new proposal also raised rates for restaurants and mobile home park residents, though at substantially smaller levels than under the 2016 plan.
Calistoga raised its water rates a couple years ago, but is preparing to do it again this year. City leaders intend to hold public hearings and community forums starting this month.
American Canyon last year formed a citizen’s committee to provide feedback to City Hall on any proposed rate increase. The Water Rate Advisory Committee is scheduled to hold more meetings in 2018, including two or three public outreach meetings.
Water bills in American Canyon are largely based on variable charges that fluctuate depending on how much water a home or business uses.
Officials say the city’s costs for providing water are mostly fixed, creating shortfalls in the city’s water fund for the past several years, particularly during the drought when customers conserved water at the city’s urging.
“That’s one of the biggest challenges for balancing a water enterprise fund, and that is the fact that revenue comes in and can go up and down quite a bit based on how much is consumed,” said Interim Public Works Director Steve Hartwig at the Nov. 28 council meeting.
“But a significant portion of what we have to pay every year is fixed, and we’re going to have to pay it anyway,” he added.
A new rate structure could result in customers paying more fixed rates, though how much more remains to be seen. Currently, water bills are comprised of 10 percent fixed and 90 percent variable charges.
A consultant hired by the city, Abigail Seaman with Bartle Wells Associates, told the City Council in late November that American Canyon’s fixed charges are “low” compared to municipalities in the North Bay.
“Typically it’s about 35 percent fixed and 65 percent variable,” said Seaman.
Hartwig said one key reason why rates need to increase is so the city has more money to pay for new pipelines and other water infrastructure that is decades-old.
The city replaced about a mile and a half of pipe two years ago that was leaking as much as 300 acre feet of water a year, or 97.8 million gallons.
He said other leaky pipelines or water mains would need replacing to keep from wasting more water.