Hollister – Residents will likely be facing a series of sewer
rate increases starting this year as part of the city’s plan to
finance a new $120 million sewage treatment plant and get the state
to lift the sewer moratorium that has had Hollister in a
stranglehold for nearly four years.
Hollister – Residents will likely be facing a series of sewer rate increases starting this year as part of the city’s plan to finance a new $120 million sewage treatment plant and get the state to lift the sewer moratorium that has had Hollister in a stranglehold for nearly four years.
“We’re between a rock and a hard place,” Mayor Robert Scattini said.
The Governance Committee for the Hollister Urban Area Water and Wastewater Master Plan released the rate increase plan – which will incrementally increase rates by 165 percent over five years – in late June.
“We’re under the gun from the state water board to get that new plant built,” said City Councilwoman Pauline Valdivia, who also sits on the governance committee.
The rate increases fit into two schemes. The first would finance the new plant solely through steadily rising user fees. The alternative assumes that once the sewage moratorium is lifted by the state, new connection fees, and in turn new user fees, will fund the plant as well.
From the current rate of $62 per single family residential household every two months, fees will increase in both schemes by the same amount over the next two years:
n In 2006-07, rates will jump by nearly half to $92 every two months
n In 2007-08, rates will jump an additional 40 percent to $129 every two months
Assuming no growth, rates will continue to rise in accordance with the first scheme:
n In 2008-09, another 39 percent hike will bring rates to $180 every two months
n In 2009-10, a final 38 percent hike will halt rates at $248 every two months
But with some growth, residents will start dolling out less in the third year under the alternative scheme:
n In 2008-09, rates will rise by 5 percent to $136 every two months
n In 2009-10, a final 5 percent hike will cement rates at $143 every two months
City Councilman Doug Emerson said he is confident that the new sewer rate scheme will not have to be fully implemented because new development will bear nearly half of the cost of the new treatment plant once the moratorium is lifted. The city plans to sell revenue bonds to foot the initial bill up front, paying it back over a 30-year period through sewage fees. The bond company requested that the city propose a rate increase to guarantee a future revenue source.
“That growth is pretty much assured as soon as the moratorium is lifted,” he said. “We have housing units backed up, waiting to be approved.”
The city has been under deadline by the state to construct a new treatment facility after the existing one dumped 15 million gallons of sewage into the San Benito River in 2002. As a result of the spill, the state placed a moratorium on sewage connections in Hollister. During the intervening years development in Hollister has come to a near standstill and the city’s economy has suffered.
“We can’t encourage businesses to come into town without (sewer) hookups,” Scattini said. “It’s devastating. The most important thing for the city is to get that plant built and that moratorium lifted. That’s our No. 1 priority.”
The plant is slated for completion in mid to late 2008, according to City Manager Clint Quilter. Construction bids should start in August, and the city is hoping to sign a contract by October, according to Emerson.
Hollister’s sewer project will proceed in two phases:
n Completion of the main plant in fiscal year 2008-09 at a price tag of $120 million. The site will include a new treatment facility, reservoir and spray fields for disposal.
n A recycling program, to be completed after 2009, which will recycle the treated water from the plant for agricultural use. Estimated cost is between $19 and $28 million.
Banks Albach covers local government for the Free Lance. Reach him at 831-637-5566 ext. 335.
