City Council begins its consideration of proposal

Some city and county residents did not take kindly Monday night to Crescent City's plan to increase water rates in order to offset current water fund deficits and upgrade the system.

The additional revenue would pay for upgrades to make the system more reliable and earthquake-resistant, as well as to offset current water fund deficits.

A handful of rate-payers told the City Council that paying the water bills they already have is a struggle and they don't use all the water they are charged for. Others said they were going to try to put a stop to the increase through the Proposition 218 protest process. One county resident even suggested the city file for bankruptcy.

"You guys are poor managers," said county resident Linda Sutter. "I guarantee you, if you raise our rates we will get a new Council and we will rescind that."

Only one person, county resident Tim Hoone, who pays a flat rate for using up to 500 cubic feet of water, spoke in favor of the proposed rate increase.

The Council unanimously approved the first reading of an ordinance that would increase monthly water rates by $6.16 - or 60 percent - in December for the average residential customer who uses 1,600 cubic feet of water per month. If approved, rates would then increase by $3.79 in 2014, $3.44 in 2015, 72 cents in 2016 and 74 cents in 2017, according to the city's staff report.

The city has had the current water rates, which are $10.26 for residential customers who use 1,600 cubic feet of water per month, since 2002. Even if they are increased, Crescent City's rates would be lower than other cities in the region such as Fort Bragg, Eureka, Arcata and Brookings, officials said.

The Council also voted to schedule a public hearing Nov. 4 and approved a resolution for receiving and tabulating possible protests against the rate increase under Proposition 218. According to City Attorney Bob Black, if the city receives protests from over 50 percent of the affected parcels, it cannot implement the rate increase.

"The tabulating of protests is on a one parcel, one protest basis," he said. "It's not a voting procedure. As to any given parcel there can be numerous people that can protest on behalf of that parcel and there's no way of other people to negate that protest."

Tenants who pay for their water are allowed to submit a protest for the property they live at, Black said. Protests can also come from the property owner, he said.

Prior to its decision, the Council heard from Public Works Director Eric Wier, Interim City Finance Director Susan Mayer and representatives of Willdan Financial, who presented an analysis of the water system and the current rate structure.

The city draws its water from an aquifer near the Smith River north of Pelican Bay State Prison, Wier said. From there, the water flows through a chlorination building, under the prison to an elevated tank off Wonder Stump Road. It is then distributed to customers via more than 60 miles of pipes, he said.

Wier presented the Council with a five-year capital improvement program that calls for a $530,450 seismic retrofit of the elevated tank, which was built in 1958, and installing a second water line from the prison to the elevated tank, which is expected to cost more than $1 million.

Other projects include upgrading the computer system that runs the system, an estimated expense of about $164,000, according to Wier. Valves and water mains also have to be replaced at an annual cost of about more than $50,000.

"The total cost estimate for the capital improvement plan for five years is $4.5 million," Wier said. "If we don't complete (the projects) now, we're basically running the system to fail."

If rates aren't increased, Crescent City's water fund will be out of cash by January and it won't be able to make a loan payment to the state in February, Mayer said. The water fund's projected deficit was $417,000 when the city adopted its 2013-14 budget in June. Its current projected deficit is $649,000, she said.

Action called overdue

In addition to needing to make repairs to an aging system, the city is also required to pay $350,000 a year in two semi-annual payments to the state, Mayer said. The city used a $7 million zero-percent interest state loan to upgrade the water tank near Washington Boulevard and install a redundant water line that serves nearly all of the system in 2000. The city has paid off half that loan, Mayer said.

Increasing the water rates will also put the city in a better position to pursue financing for the projects on its five-year capital improvement plan, Mayer said. The city's long-term goal is to set up a contingency plan that will kick in if a project goes over budget, she said.

"Delays in increasing rates will result in larger rates in the future," Mayer said.

In his presentation to the Council, Willdan representative Jonathan Varnes said single-person dwellings pay a rate that has a water allotment of up to 500 cubic feet. He noted that in addition to paying for their water usage, those residents pay for the system that delivers that water. Larger users pay a larger rate, Varnes said.

"You can immediately tell a system that hasn't had a rate increase in a long time," Varnes said.

Willdan's rate analysis, not only calls for increasing water rates for residential users, it also calls for increasing the rate for Pelican Bay State Prison, which receives city water and pays for it on a per-1,000-gallon basis rather than per cubic foot.

According to Mayer, the prison reduced its water usage by 50 percent. Willdan's rate analysis calls for increasing the prison's water rate from about 76 cents per cubic foot to $2.07 per cubic foot.

'No incentive to conserve'

During the public comment period, former City Councilwoman Donna Westfall asked if the city would be willing to provide a list of water customers' names, addresses and parcel assessor parcel numbers to the person who is heading up the Proposition 218 protest effort.

Westfall said residents of Dixon in Solano County were able to obtain that information when water and sewer rates were being increased. She also reminded the Council of a request to be kept informed of all communications between the city and Willdan.

"It's my belief that the city spoon-feeds Willdan info to get predetermined results," Westfall said.

County resident Jan Darling, who pays the flat rate of 500 cubic feet per month, said she pays for more water than she uses. There's no incentive to conserve, she said.

"I've lived here for 34 years and I have paid for 102,000 cubic feet of water that I've paid for, but don't use," she said. "Single people are getting screwed over on all kinds of things. We pay for what families are using."

Several Council members told residents that they were not only paying for the water that comes from the tap, but also the maintenance and integrity of the entire system.

"I don't know if the city has ever reviewed or analyzed a conservation policy," said Councilwoman Kelly Schellong. "I think the answer is probably no and the reason is I don't think we've ever needed to conserve water is we've always had plenty. That's the beauty of living here and having access to the Smith River."

After speaking with Willdan representatives as well as city staff about the water system, Schellong said she thinks the city should have a depreciation policy for its facilities and equipment. She added that the Council should review the status of the city's enterprise funds more than just once or twice a year and should also review all of its contracts and loans.

"I've sat on two Councils now that have continued to have to pay the price for lack of action in the past," she said. "I think it's the staff's job to help the Council move forward in a more prudent manner so we're not raising rates for 10 or 15 years and then putting our rate payers in this kind of a position. It's unfair, however it's reality and we're the people that have to deal with it."

Protecting privacy

In response to Westfall's comments about Dixon, Mayor Rich Enea said he spoke with Dixon officials and found out that its water service is administered through the California Water Service Company and the Solano Conservation District.

The California Water Service Company is regulated by the California Public Utilities Commission, which isn't covered by Proposition 218 protest guidelines, and the Solano Conservation District is a joint powers authority with the city of Dixon, Enea said. Dixon doesn't control the community's water rates, he said. Enea added that he doesn't want the city to get into the business of releasing parcel numbers.

"There are 900 or so correctional officers, police officers and deputy sheriffs in this community," he said. "Including myself, I didn't sign on for water or sewer to have my name given out for solicitations. It's private. You can go door to door to ask people if you want to. The city's not in the business of releasing parcel numbers. We have customers that don't want to be called upon."

The city's water system has 4,100 individual meters, 490 hydrants and serves a population of about 14,000 - many of them non-city residents, according to Wier.

For more information about the water system and the rate analysis, visit

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