AMERICAN CANYON — Ratepayers in American Canyon will see higher water bills starting next January after a decision Tuesday night by the City Council to adopt a new rate structure.
The council also directed staff to develop an assistance program for low-income residents to afford the higher water rates.
Under the new rate plan, a typical monthly water bill of $49.04 — for single-family residential customers using eight units of water — would rise to $55.35 next year, $62 in 2020, $69.41 in 2021, $77.66 in 2022, and $86.85 by 2023.
A unit of water is equivalent to 748 gallons.
City officials said it was necessary for rates to rise to fix longstanding imbalances in the city’s water fund and to pay for million-dollar improvements to an aging water infrastructure.
The new rates will replace the $2 per unit surcharge in effect since 2015 to cover some of the fiscal imbalance in the city’s water fund brought on by water conservation implemented during the drought.
“I believe we’re doing the right thing here,” said Councilmember Kenneth Leary before joining the rest of the council in voting for the rate increase.
The last time the city approved higher water rates was December 2007, according to Public Works Director Steve Hartwig. That increase was also spread out over several years, from 2008 through 2011, he added.
Before approving the new rates, the council authorized staff in March to send out public notices informing ratepayers of the proposal, as required under state law established by Proposition 218 in 1996.
That law mandates notices go out at least 45 days prior to a public hearing that seeks a rate increase. City staff said the notices were mailed out March 30.
If more than 50 percent of ratepayers objected to the plan in writing — about 2,600 customers — the council would have been prevented from considering the rate increase.
But the city had received only 65 written objections as of Tuesday night’s meeting, according to City Clerk Suellen Johnston.
About half a dozen residents spoke during the hearing to voice their opposition to the plan.
Claudia Ramirez said it wasn’t fair to raise rates when the water at times smells bad or is discolored, something American Canyon has long struggled to change.
“Why am I being asked to pay for water of lower quality?” she asked the council. “The taste is not very good.”
Hartwig responded to this concern by saying the rate increase would provide funding for the city to make improvements in its water processing and delivery systems.
Another resident named Claire, 87, said she and the person she lives with already pay $75 to $95 a month for their water and sewer service.
When you’re on Social Security and have bills to pay, “it’s kinda rough” to afford a rate increase, she said.
The council ordered staff to devise a new assistance program for low-income, single-family residential customers to ease the burden of the rate hike. That plan is expected to be developed and in place by next January when the first increase goes into effect.
Hartwig said the city could model their new program on Pacific Gas & Electric Co.’s California Alternate Rates for Energy (CARE) program. He recommended this approach because PG&E’s program utilizes precise income qualifying guidelines.
He said the city could provide enough of a subsidy that it would “zero” out the increase in the fixed water rate charge for low-income customers during the first year of the new rate structure.
The subsidy would be equal to $6.40 a month or $76.80 a year, according to Hartwig.
But the subsidy would not cover all of the fixed rate increases in succeeding years unless the council authorizes enough funding to cover them, Hartwig said.
The council is expected to revisit the creation of the low-income assistance program sometime later this year.
Under the existing rate structure, 90-93 percent of water bills are based on variable rates that fluctuate depending on how much water a customer uses, with the remaining 7-10 percent based on fixed charges.
This rate structure resulted in the city collecting less revenues than it costs to purchase, treat and deliver water to homes and business, officials say.
The new plan calls for bills to be based on 80 percent variable rates and 20 percent fixed by the time the new rate structure is fully implemented by 2023.