Sonoma City Council eyes water-rate hikes

Annual increases could be on tap as city confronts rising H20 costs|

The City of Sonoma will test the waters this summer about a possible water-rate increase that could see Sonoma customers’ rates ratchet up several times over the next five years.

The Sonoma City Council voted 5-0 at its June 25 council meeting to issue a 45-day notification to ratepayers of the proposed series of hikes that would find rates at nearly 50 percent above what they are currently by 2023. A public hearing is tentatively set for Aug. 20 for the council and community members to consider the proposed increases.

The proposed rate hikes are based on a water rate study conducted this year by Raftelis Financial Consultants – and following a 3.5 percent hike that could go into effect Sept. 1, rate payers would absorb additional 7.5 percent hikes beginning each July 1 for the following four fiscal years. And this is on top of a 5 percent rate increase that already went into effect at the beginning of 2018.

The impact on Sonomans’ pocketbooks would be rate increases among most users from around $2 to $3 per month through 2023.

City water rates were last updated in 2014. But during the recent drought years, the utility’s 4,700 water customers conserved about 26 percent beyond what it had in 2013, the baseline year for when rates were last updated. Such a decrease in water usage, of course, also tightened the spigot on revenue to the Sonoma Water Agency, which this year has a budget of $5,004,355.

Meanwhile, city officials foresee the city’s water expenses increasing significantly over the next five years. Sonoma obtains about 92 percent of its water supply from the Sonoma County Water Agency – while that amount is predicted to drop to about 87 percent due to an increase in well-water usage, the SCWA is expected to increase its rates for water purchased by the City of Sonoma by 6 percent per year through 2023. At the same time, operational expenses are expected to increase between 4 to 5 percent per year.

Additionally, city staff anticipates spending about $1.5 million per year for the next five years on infrastructure – replacing aging pipes, upgrading meters, etc.

Sonoma’s is not the only water agency in the state having to overhaul its rate structure. That’s because of a 2015 decision by the California State Supreme Court which ruled it was unconstitutional for cities to charge tiered water rates that encouraged conservation by penalizing guzzlers with higher rates. The court, in Capistrano Taxpayers Association, Inc. v. City of San Juan Capistrano, ruled against the City of San Juan Capistrano, because it failed to base the fees on the actual cost of providing water to customers, as required under state law.

It’s not all bad news for the Sonoma Water Agency coffers, however. The agency is saving about $172,308 per year in funds that were formerly transferred to the city’s general fund; last year local water watchdog Chris Petlock brought to light that such transfers were no longer allowed under state law and, after reporting by the Index-Tribune, the city discontinued the practice.

Petlock, who’s an employee of the Valley of the Moon Water District which serves outside the city limits, urged the council on Monday to consider holding the new rate structure to merely a year.

“Adopt one year, take some time, look at how that cost allocation study really pans out,” said Petlock. “Are these really the true costs of the utility?”

Petlock broached the subject of “majority of protest,” in which if more than half of the utility’s customers file a protest, the rate change would be prevented from going into effect.

“It really only takes one motivated rate payer to send all this stuff into a tizzy,” said Petlock. “It only takes one person to challenge all this.”

In the end, all five council members supported initiating first steps toward rate increases by sending out the required 45-day notification. Only Councilmember Amy Harrington expressed reservations about the rate hikes recommended in the study.

“I still think the rate is a little bit high for poor people, so I’m a little concerned about that,” said Harrington. “But people have to take it upon themselves and be active in their government and they’re going to receive the notice and if it’s too high and that’s a problem then they need to come down here and tell us.”

Email Jason at jason.walsh@sonomanews.com.

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