In the News

Few turnout for water rate forum in Santa Cruz
City Council will consider five-year hike Tuesday

By J.M. Brown, Santa Cruz Sentinel, 9/18/14

SANTA CRUZ — Flanked by 10 staff members Wednesday, Santa Cruz Water Director Rosemary Menard trumpeted the need for a proposed five-year rate increase and drought-recovery fee to a room packed largely with empty chairs.

Among the nine audience members, which included a City Council member and water director from a neighboring district, a few customers asked questions about the rate hike and the current status of the water supply. But the low turnout at Louden Nelson Community Center left some to wonder whether ratepayers are saving their concerns for the council, which will take up the matter at 7 p.m. Tuesday.

Wendy Russell, a nine-year resident of Santa Cruz who works in Monterey County government, said she was surprised only a handful showed up to question the director, who has recommended a 10 percent increase in October and each year in July for the next four years. The money largely will go toward paying for a host of capital projects to improve the treatment and conveyance of water, which is funded solely through rates and hookup charges.

"Ten percent a year is too much, particularly for people on fixed or low incomes," Russell said. "They don't get a 10 percent increase in their salaries."

The rate hikes, which would be applied to the basic service charge and separate usage charge, would raise an estimated $40.5 million. Menard also has recommended a drought recovery fee that would be in effect for this year and next and raise a $3.25 million to replace funding lost by selling less water during the mandated rationing that went into effect in May.

By comparison, the department's annual operating budget is $25 million and it has $48.2 million in planned capital spending. Some of the new funding would help the utility establish new reserves totaling $8 million and refill a stabilization fund of $2.3 million to decrease the impact of future rate increases.

The hike also will generate new general fund revenue for the city due to the utility users tax of 8.25 percent applied to water charges. Up to $880,000 will be available for basic city services during the five-year period, which includes the city's own costs for buying service for municipal property.

Menard said the cost of delivering a gallon of water to customers is six-tenths of one cent and at the end of the rate increases will be a penny. The last rate increase was 2011 after hikes from 2004-2008.

"I know it's a big change," Menard said. "It's a very good value what you get for the rates you pay."

Nina Dona, a resident of Live Oak, said her community has cut consumption two-thirds as part of the rationing designed to cut overall use among its 94,000 customers 25 percent.

"Part of the reason our bill is going up is because were conserving — that goes against the grain a bit," Dona said. "This is an extreme shocker to a lot of us."

Yet, Dona said she believe Menard explained well why the increase was needed, and she noted the rate increase flier all customers were sent.

"It was a wonderful opportunity," she said. "I'm surprised so many people missed it."

Vice Mayor Don Lane, who attended the meeting, said he will not pursue passing a 21-month increase Tuesday, a plan as he asked the council to explore in July.

"It doesn't demonstrate to lenders a commitment to having enough money to do it," he said of the capital improvements.

What: Consideration of a five-year water rate increase.

When: 7 p.m. Tuesday.

Where: Council Chamber, 809 Center St.

Information: cityofsantacruz.com

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