Water rates for Hollister customers could increase 30 percent,
and the city’s sewer rates may double, according to preliminary
reports of a fee study commissioned by the City Council.
Water rates for Hollister customers could increase 30 percent, and the city’s sewer rates may double, according to preliminary reports of a fee study commissioned by the City Council.
That means the 6,200 households Hollister serves water to will likely see significant increases to their bi-monthly bills – the first jump in 13 years, according to City Manager Dale Shaddox. He said revenues from charging water-consuming residents are short of expenses by more than $500,000.
And households throughout Hollister charged every other month to offset costs at the wastewater treatment plant should prepare for a wallop to their wallet as well. It is unclear how much sewage treatment expenses exceed revenues earned from billing residents.
That spike would pay for rising costs of sewage treatment, as well as subsidize a $20 million debt incurred through building a new wastewater plant expected to be online in early 2006.
An approval to those increases and others would be up to Council members, who hope to have city-wide fee updates implemented before the new fiscal year begins July 1.
“There’s no question it’s not going to be pretty,” Mayor Tony Bruscia said. The 13-year span between water rate increases – and the fact that many other fees haven’t been updated since the mid-1980s – convinced City Manager Dale Shaddox a study was necessary. And Council members agreed.
Water rates are one of more than 20 fees the firm, Temucula-based Munifinancial, has examined over the past five months. The city will receive a final report “any day,” Shaddox said.
Water rates are determined using a formula that takes into account the amount of water a customer uses and the size of each water meter, according to a resolution approved in 1991 that set the current rates.
Base rates for single family dwellings inside the city range from $9.90 to $14.40 – plus additional charges for water use that surpasses 1,000 cubic feet per month, according to the resolution.
There’s an array of water districts within San Benito County overseeing such operations and charges, according to San Benito County Water District head John Gregg.
Some other charges include sewer rates and development impact fees, which go toward public safety and other services that include street sweeping and road maintenance.
Hollister paid the firm $130,000 – a necessary investment, officials say – because such raises should be substantiated. Without it, the city could be susceptible to legal challenges, particularly from developers potentially disputing impact fees charged for new construction, according to city officials.
Councilman Robert Scattini was the only member who voted against hiring the firm.
“Oh geez,” Scattini said when told Thursday of the likely hike in water and sewer rates. “It’s going to be so hard to live here; everybody’s going to move out of town.”
Scattini pushed for an in-house examination and update. That’s how San Benito County plans to handle its fee structure.
In the coming months, county department heads – as opposed to a hired consultant – will examine its charges, according to County Administrative Officer Terrence May.
It would be appropriate, city officials say, to update such fees more frequently – perhaps every year or two – so customers won’t get slammed with such sharp increases.
The city will likely tie the fees to an annual index for appropriate increases, Shaddox said, “which would allow those to keep current with inflation.”
Neighboring Gilroy “normally” updates its water rates once a year, according to that city’s revenue officer, Irma Navarro. Its most recent revision was implemented in July, she said.
“I would say the ‘norm’ is to not exceed about five years for a complete review,” Shaddox said, adding that “preferably” Hollister would do a study every three years.
It is unclear how much potential revenue, by leaving water and sewer rates alone, has been lost over the past two decades. Officials have acknowledged the amount is likely considerable.
Scattini commended Shaddox for spearheading the update, but chastised former management for letting the fees stagnate.
“Somebody dropped a whole big ball,” Scattini said. “They’ve been dropping that ball, and it’s about time somebody catches it.”
The goal with the update is to balance the city’s revenues and expenditures for those services, according to Clint Quilter, public works director and interim city manager when Shaddox departs May 11.
It would be a start toward closing a projected $4 million gap in the city’s budget for 2004-05.
“We’re in a world where costs are going up,” Councilwoman Pauline Valdivia said. “We have to keep up with that in order to keep the services.”
