Action is taken despite in spite of concerns about costs

The Crescent City Council gave final approval for a $5.38 monthly residential sewer rate increase Monday despite some citizen complaints and concerns that the move may result in higher rent for some residents.

The council's unanimous decision also increases water rates for multi-family residential properties in the city and county by 62 cents per 100 cubic feet. Light commercial water rates in the city and county will increase by 46 cents per 100 cubic feet. Heavy commercial water rates in the city and county will increase by $1.12.

The water and sewer rate increases will take effect May 1.

The sewer rate increase is the last installment of a $30 increase that was approved by the City Council in 2007, according to City Manager Eugene Palazzo.

The last increase was originally planned for June 2010, but was deferred after the city was able to extend a 20-year loan for the wastewater treatment plant expansion project to a 30-year loan, according to a staff report.

The expenditures in the city's sewer fund currently outweigh its revenues by $650,000, according to Palazzo. The rate increase is expected to increase revenue by about $300,000.

During public comment, county resident Wilma Lucero asked the Council to consider other ways of raising sewer revenue and keeping the wastewater treatment plant in compliance with state environmental laws short of a rate increase. To many homeowners, $5 more per month is a struggle, she said.

"I know so many families, so many individuals, seniors, who are able to continue living here by keeping their overhead down. That's the key to their survival," Lucero said. "As far as people who are renting, they can be assured that their overhead will raise. That will be one more reason why rents go up."

City resident Richard Miles said although he's able to pay an extra $5 a month in sewer rates, he wanted to see the Council put a statement in its ordinance preventing landlords from using the rate increase as an excuse to raise rents.

Former Crescent City Councilwoman Donna Westfall said the city should not increase sewer rates because it is in violation of California's Proposition 218 law, which states that expansion should be paid for by developers, not ratepayers.

Westfall also brought up an injunction the city obtained in 2010 over an initiative she spearheaded to roll back sewer rates to pre-2007 levels, and a Proposition 218 protest hearing that was held prior to the rate increase being passed.

"Our city continues to ignore reality. Reality is the loss of jobs, closing businesses, homelessness, inflation, foreclosure, more people moving out of the area than moving in, continued hard times and rising costs and especially the rising cost of government," she said. "I strongly urge you to not pass this latest $5.38 a month increase. And I advise you from now on I will be paying my sewer bill under protest until such time that you are under compliance with Prop 218."

Before the Council approved the rate increase, Councilwoman Kelly Schellong pointed out that the city had held a Proposition 218 protest hearing in 2007, but the number of people protesting weren't enough to prevent the sewer rates from increasing.

"The voters did speak by the protest failing," she said. "I know that any increase is hard. Nobody wants to sit up here and raise rates, but it's a part of reality."

Schellong also asked Housing Authority Director Megan Miller how the rate increase would affect families and landlords who participate in the housing subsidy program.

Miller said whether utility increases result in rental increases depends on the level of subsidy a family gets. A landlord would also have to go through a specific process before increasing rents, she said.

"It would be at least a 60-day period before the tenant would see their rent increase," Miller said, adding that it's difficult to tell how many tenants would have to pay higher rent. "I would say we probably have about 30 percent who could have more subsidy made available to them. The other 70 percent are probably at the maximum level of subsidy."

The current sewer and water rate increase comes shortly after the City Council approved a contract with Temecula-based Willdan Financial on March 4 to conduct a sewer and water rate analysis.

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