Wednesday, July 30, 2014

Big rate hikes in Sacramento

From page A6 | April 02, 2012 |

El Dorado Irrigation District customers aren’t the only ones facing rate hikes. Sacramento city residents are in for a three-year series of large rate hikes.

We can only say large because Sacramento’s city utility commission has such a strange basis on which to determine sewer bills that we have to echo what EID Director Alan Day said: “This is kind of complex.”

While EID has a one base rate for single-family residences, Sacramento charges for both water and sewer service by the number of rooms. It starts with one to three rooms and goes up to 15 rooms, then adds a charge for each room above 15. Who knows what kind of homes they are talking about.

All one can go on is what the city says is the average water and sewer customer. Sacramento bills monthly, while EID bills bimonthly.

The average water and sewer monthly bill in Sacramento city would go from $49 to $68 in three years (bimonthly equivalent of $90 to $136). That is cheaper than EID because Sacramento is flat and compact. Because EID serves a very hilly area it has 64 sewer lift stations that cost $1 million each to replace every 30 years. Nothing is cheap in the foothills, from utilities to roads.

Because of the strange way of billing it is impossible for a layman to figure out an overall percentage increase for the capital city. Sacramento water rates are going up 10 percent a year for three years. Sewer rates are going up 16 percent starting July 1, 15 percent in 2013 and 14 percent in 2014.

EID’s single-family water base rate increases over four years are 6 percent, 11 percent, 11 percent and 5 percent. Overall from 2012 to 2015 that is 37 percent. No such overall figure is figurable for Sacramento, nor has it been offered.

In one fell swoop Sacramento will run up $344 million of bonded indebtedness to pay to upgrade a 90-year-old wastewater treatment plant, replace 15 miles of pipes and buy $57 million worth of water meters to meet a 2025 deadline to meter every house. It took EID a decade to reach that figure and it got two modern sewer plants that treat water well enough to drink, it got sewer and water lines replacement, a tunnel, three dam upgrades and replaced a number of flumes to bring the high mountain water into four water treatment plants.

The rate hikes are also going to fund $150 million to upgrade a 90-year-old Sacramento water treatment plant.

How has the city of Sacramento got away with operating water and sewer plants that are 90 years old? That’s just incredible.

The ratepayers of Sacramento County, including the city of Folsom, are going to wind up paying more than EID customers when it is all said and done. The Sacramento Regional Sanitation District will no longer be able dump partially treated sewage into the Sacramento River, relying upon dilution.

That district will be building a billion dollar sewage plant that will meet the same standards the state has forced EID to meet for the past 10 years. Sacramento will waste millions waging a legal battle that it will lose versus the Regional Water Quality Control Board. Then after wasting time and money, engineering and construction costs will go up on the new tertiary wastewater treatment plant it must build. It could be as much as $2 billion.

We’re not happy about EID rate hikes and we’re not happy with its debt load. But  we are thankful EID’s water treatment plants and sewer plants are not 90 years old. EID at least has a plan that it follows to regularly replace aging facilities, starting with the most critical ones. And the new manager has been shaving expenses and saving money to fund capital expenditures from reserves, avoiding bonding for as long as possible.



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