After a public hearing that lasted just under two hours, the Williams City Council approved, in a 4-1 decision, water and sewer rate increases that will total 12 percent over a period of four years.
After 2020, the rates will be adjusted based on the Western Urban Consumer Price Index, with a cap set at 2 percent.
City council member Kent Boes made the motion, which included a stipulation that city staff look into a rebate plan for lower income residents who would have a difficult time paying for the rate increases. Mayor pro tem Alfred Sellers seconded the motion.
Council member Chuck Bergson cast the lone dissenting vote, but indicated that he was also be in favor of an assistance program for low income residents.
Ten residents spoke out against the rate increases. Nine of those residents spoke in Spanish, with city clerk Mariana Pineda translating. Pineda also translated the council’s comments into Spanish throughout the meeting. There were 19 letters in opposition submitted to the council. A total of 600 letters of opposition were required to put a stop to the rate increase. Ten of the letters received opposed both water and sewer increases, six opposed just the water rate increase, and the balance of the letters opposed only the sewer rate bump.
The three percent annual increases in sewer rates, which will begin in December 2016 and stretch through 2020, will enable the city to pay back a $2.25 million loan from the United States Department of Agriculture.
The city successfully qualified for about $4.5 million in funding for the Sludge Processing Improvement Project, which includes the removal of sludge from the city’s wastewater treatment ponds and the construction of a “sludge wasting tank” to process sludge on a daily basis.
About half of the funding was grant money from the USDA, and the balance came as a loan. The loan, at project completion, would be amortized over 39 years, with an interest rate of 1.75 percent and annual payments of about $81,000, city finance officer Rex Greenbaum told the council.
Without approving the sewer rate increase that night, Greenbaum said, the city risked losing the funding for the project. Without the funding, the city would still have to remove the sludge, and the annual payments would be nearly double the rate.
According to Mayor John Troughton, the city’s hands were essentially tied in terms of the improvements to the wastewater treatment facility.
“Part of the problem is that this is a situation we cannot avoid with the Water Quality Control board. If we don’t, there’s going to be a problem there,” Troughton said.
The state’s Regional Water Quality Control Board necessitated the removal of the sludge at the city’s wastewater treatment ponds, stating that the sludge was contaminating groundwater with nitrate at a level that is four times the acceptable level for drinking water.
“The sludge has created the issue… It’s much cheaper to remove the source and get rid of it, and over time the groundwater will clean up. If you don’t remove the source, we’re going to have to tell you to do a groundwater cleanup, which is pumping that groundwater out, removing the nitrate, and then doing something else with the water,” Central Valley Regional Water Quality Control Board representative Wendy Wiles told the council. “As long as you have that sludge there, you are going to have that problem with that groundwater.”
Greenbaum said that during the application process for the $4.5 million in grant and loan funding, the USDA took into consideration the capital needs of the city, along with the city’s repayment ability of related financing. Based upon the USDA’s analysis of the city’s financial position, it was determined that the four annual rate increases of three percent were needed for the city to qualify. According to Boes, the rate hikes were initially much higher.
“When we first heard this in finance committee, Rex (Greenbaum) threw some numbers at me that were somewhere in the neighborhood of 7 or 12 percent, I can’t remember offhand… I basically told Rex absolutely not, but I used much stronger language.”
Boes said he insisted upon a more reasonable rate for Williams residents, and that the rates be adjusted according to the CPI to avoid large rate hikes in the future and implement something that is more palatable on a year-to-year basis.
“This is a good plan. The alternative to this plan is much, much worse,” Boes said.
“Apples and Oranges”: Bergson opposes Water rate hike
Council member Chuck Bergson, who made a motion to approve the rate increase for sewer but not for water, ultimately voted no on the rate increases as adopted.
“I’m voting no because there are two parts to this motion: one for sewer and one for water. It’s not necessary to pass the water rate increase at this time, and I’m not sure about the advisability of passing the sewer rate increase at this time, also. I believe the water board when they tell us there is contamination, and it needs to be corrected, but I’m not sure that this large sewer rate increase is needed at this time,” Bergson said.
He previously said that the water rates and sewer rates should be severed, as passing them together was comparing apples and oranges.
His motion to approve only the sewer rate increase failed without a second. Bergson said he made the motion “only in the interest of keeping the (sewer project) loan on the table.”
When Bergson pressed him, Greenbaum admitted the water rate hike would not effect the funding for this project from the USDA. However, Greenbaum said that the water rate increase was factored into another grant application for $4.9 million water infrastructure improvement grant, and that not approving it could effect the outcome of that separate application.
“My grant shows us being balanced, with the 3 percent increases, and it goes out seven years. It’s a separate grant application,” Greenbaum said.
Troughton, Boes, Sellers, and Jauregui all said that they were hesitant to shoot down the water rate increase if it would jeopardize another grant application.
“What I’m worried about is the uncertainty: The uncertainty could kill us,” Troughton said.
Sellers agreed, saying, “We don’t want to cut our foot.”
The four council members that voted in favor of the increase said that it could come back and look at water rates, and potentially lowering at a later date, which factored into their decision to approve the water rate hike.