City Council Recap: Council pursues smaller water and sewer increases
City Council Recap: Council pursues smaller water and sewer increases
City council requests that city consultant Raftelis re-do the Rate Study based on lower increases for water and wastewater. It also approved a new heater for Ives Pool.
All members of the city council were present for the June 4 city council meeting, including Mayor Diana Rich, Vice Mayor Stephen Zollman, Councilmember Sandra Maurer, Councilmember Jill McLewis, and Councilmember Neysa Hinton. City Manager Don Schwartz was out sick.
In reaction to public concern about sky-high water and wastewater rate increases discussed at previous city council meetings, the Sebastopol City Council signaled a clear preference for smaller rate hikes at their June 4 council meeting.
Earlier this spring, Raftelis, the city’s consultant, offered the city council two options for both water and sewer rate increases:
Option 1 rate increases were steeper and designed to put the system back on a firm financial footing faster;
Option 2 involved smaller rate increases and a slower path to recovery.
(See a fuller description of these two options here.)
At their April 23 council meeting, the council decided to go with Option 1 for water and Option 2 for sewer. At their May 21 council meeting, they backed away from this plan, directing staff to provide a deeper analysis of the lower-cost Option 2.
At the June 4 council meeting, with Option 2 numbers in hand, the council directed Raftelis to rework sections of the Rate Study to reflect the smaller water and wastewater rate increases embodied in Option 2. (The city will have to pay Raftelis an additional $5,035 to redo sections of the Rate Study. Raftelis also asked for an additional roughly $49,000 for work it did beyond the scope of the original $75,000 contract. All councilmembers opposed paying this higher figure.)
The city council will vote to approve or reject the Option 2 rate increases at the June 18 council meeting. If they approve them, the new rates will appear on your July bill.
Still a heavy lift
Though smaller than those of Option 1, Option 2 rate increases are still relatively hefty. In the first year, they would result in a 37% revenue increase for the city’s water fund and a 50% revenue increase for city’s wastewater fund—which is what it will take to set these funds back on the path to solvency.
This doesn’t mean your water and sewer bill will go up by those amounts—individual rate payers’ bills vary widely and depend on a number of factors, including how much water they use, how much wastewater they create, whether it’s a residential or business account, and how big their pipes are.
Part of the council’s evident frustration at the previous council meeting was the consultants’ seeming reluctance to provide dollar and cents examples across a wide range of situations. Instead, the consultant emphasized just one concrete scenario: a single family residence, whose bill went from $114.24 to $151.81—an increase of roughly 33%.
But it was clear that for some businesses—particularly those that use a lot of water, like cafes and restaurants—and other large water users, like schools, the rate increase would be much, much larger.
A tenant of one large commercial building downtown, who didn’t want to be identified, said they’ll see a 67% increase under the new rates.
Here’s a quick look at how the various increases will shake out for the average home or business.
“We were told that rates are gonna go up by about 33%,” Councilmember Maurer said. “However, that’s just for a certain class of customers. It’s not for all customers. Some customers are getting bills that are gonna be over 100%. It’s not 33% across the board, so that was extremely confusing.”
Maurer suggested that over several years there could be a 300% increase for low-income seniors at Fircrest Mobile Home Park and other low income apartment complexes. Toni Bertolero, the analyst from GHD, the city’s engineering consultant, disputed this figure in a separate discussion, arguing that the increase at Fircrest would be similar to that of single family homes—around 33%.
Why is the city increasing water and sewer rates?
According to the staff report, “Water and sewer rates have not covered the costs of operating the city’s water and sewer systems since Fiscal Year 2019-20. In addition to the fiscal condition of the enterprise funds, the city’s water and wastewater systems are in poor condition. The council, at multiple meetings, has been presented water and wastewater rate increases that are necessary to cover these costs.”
This year, the city’s general fund will need to subsidize the wastewater fund by $1.1 million, and the water fund is barely solvent.
The city needs to get its water and wastewater funds back on a firmer financial footing, in part so that they are able to borrow money for large infrastructure improvements, like the replacement of aging Well 4, which provides 30-40% of the city’s water.
How much will you pay under the new system?
You can use the following charts to figure out what these rate increases will mean for you. You can also use the online water and sewer rate calculator on the city’s water and sewer rate information page. (Don’t expect some fancy online calculator; this is a spreadsheet.)
How to figure out your water rate
Your water bill is made up of two parts: a fixed cost based on the size of your pipe (most residences are less than 1 inch) and water usage.
You can figure out your fixed cost by looking at your bill, which tells you the size of your pipe (or meter). This makes up your base rate, then your water usage is added on top of that.
Figuring out your water usage is a little more complicated. These tables are figured in kgals—one kgal is 1,000 gallons, 7 kgal is 7,000 gallons—but we’re going to use more familiar metrics. The three-tiered system rewards people for using less water, so the first 7,000 gallons you use is charged at the lowest rate of $5.01 per thousand gallons. The next 8,000 gallons you use is charged at a slightly higher rate—$6.39 per thousand gallons. Beyond that, you’ll be charged at the rate of $8.87 per thousand gallons.
This system is designed to both encourage water conservation and to be fair to ratepayers—people who use the most, pay the most.
How to figure out your wastewater rate
Your wastewater rate is determined by the size of your pipe, which is listed on your bill, plus a volumetric rate based on average winter use.
How does this compare to other cities’ rates?
The table below shows a comparison with nearby cities. It includes both the current Sebastopol rate and the proposed Option 2 rates for water and sewer. This table is based on an average Single Family Residential user who uses 4,500 gallons of water per month and a winter average (for sewer billing) of 2,500 gallons per month. The Option 2 rate is 33% higher than the current rate.
Public comment
Public comment was almost universally against the rate increases. Myriah Volk from the Chamber of Commerce asked the council to “take into consideration the business community,” particularly coffee houses and cafes that are “the heart of this little town.” The owners of Honeymoon Yogurt showed up to oppose the rate hike.
“We're just going to kill our businesses if we go ahead with this system,” said Oliver Dick. “It's not sustainable.”
Kate Haug suggested that the city should use an infrastructure fee or parcel tax, rather than increasing water rates, to pay for water and wastewater infrastructure. She questioned why water should be so expensive when Sebastopol has its own aquifer, and the city doesn’t have to buy water. She also accused the city of misallocating funds from the water and wastewater funds to the general fund—thanks to the city’s dependence on an out-of-date cost allocation study.
Only one person spoke in favor of the rate hike, former county supervisor Ernie Carpenter. “Past councils have deferred these decisions,” he said. “They’ve kicked the can down the road…You're in a pickle. You cannot defer this, you cannot wish it away…you’ve got to get these rate increases in place, and you can't wait much longer.”
Frequent council commenter Steve Pierce said after the meeting that he was disappointed by the large number of people who opposed any rate increase and disappointed in the council for shying away from Option 1, the higher rate increase which would have restored the water and sewer funds to solvency sooner.
“Nobody wants to pay higher rates for sewer and water. But the question is, what is the alternative?” he said. “The city probably should have been spending more on this infrastructure in the past. If the city decides on lower rate increases, will we have sufficient revenue to keep our infrastructure going, or will we just keep pulling from reserves which makes our financial future even more precarious.”
The final motion
Vice Mayor Stephen Zollman made a motion to ask staff to ask Raftelis to rework the Rate Study to reflect Option 2 for water and sewer—and to pay Raftelis the additional $5,035 to do so. After another half an hour of debate, Councilmember Neysa Hinton seconded that motion.
Hinton noted that it was the same concern for small businesses and low-income residents that kept the previous council from raising rates when they should have—and that their failure to do so is what landed the current council with their present dilemma.
At the end of the discussion, the council broke along now familiar lines, with Councilmembers Maurer and McLewis opposing the motion, and Mayor Rich, Vice Mayor Zollman and Councilmember Hinton supporting it.
Both Maurer and McLewis expressed frustration that they weren’t presented with more options to choose from.
“No one's gonna be surprised that I've gotten frustrated with this process,” McLewis said. “I have from the very beginning said that I don't agree with the tier system. I think it punishes families…And then I also worry about the schools and the impacts they're going to have with the massive increases because it is not just that 33% or 47%. It is over 100% for them in some of the schools.” She also noted that many small businesses would be hurt by the rate hike as well. “I just want the public to know that this has been an extremely frustrating process, and I do wish that we had more options.”
Neither Maurer nor McLewis, however, offered any solutions as to how the city might support its water and sewer systems, if not through increased rates.
What comes next?
The council will make its final decision on the rate hike at the June 18 city council meeting.
Learn more about this issue on the city’s Water and Sewer Rate Increase page here. The FAQs at the bottom of the page are particularly helpful.
What else happened at the June 4 city council meeting?
In addition to the rate increase discussion, the council agreed to pay for half the cost of a new Ives pool heater, a sum of $42,860. Western Sonoma County Swimmers, which runs Ives Pool, is picking up the other half. The council also agreed to ask Supervisor Hopkins if the County can help cover some of the cost. The vote was 4-1 in favor, with Councilmember Zollman opposed due to budget and contract concerns.
There were several public hearings that evening, but they were non-events, with virtually no public comment. The council unanimously approved the following:
the annual Recology garbage services rate increase of about 3.7%, which is contractually required;
the user and regulatory fees schedule, an inflation adjustment to things like planning, building, engineering and park fees, etc.
the weed abatement resolution. Every year the city sends out warning notices to property owners whose properties are so overgrown with high weeds that they present a fire danger. The city requires them to mow the weeds. This was the property owners’ chance to object. No one did.
At the request of staff, the council pushed the public hearing on the street lighting assessment to the June 18 meeting.
Proclamations: The council also declared June to be LGBTQ+ Pride Month and June 19 as Juneteenth.
It's interesting that the general fund has subsidized the water and sewer budget this year. In the past it's been the other way around. Maybe without raising taxes it will all even out without raising rates by some astronomical amount.