Hollister
– Locals will get a final chance to voice their objections to
the city’s plan to raise monthly sewer rates to fund a $120 million
wastewater treatment plant during a public hearing tonight.
Hollister – Locals will get a final chance to voice their objections to the city’s plan to raise monthly sewer rates to fund a $120 million wastewater treatment plant during a public hearing tonight.
The city will hold the public hearing on the proposed rate hike, which will raise monthly sewer rates 165 percent by 2009, at 6:30pm at the City Council Chambers. Hollister homeowners can prevent the passage of the new rates with a majority objection, but city officials don’t expect significant opposition to the increase, City Councilman Brad Pike said Monday.
“There are going to be a lot of people there. And I think we’re going to hear from a lot of people confused about why we are raising their rates,” he said. “But I think this will be educational.”
Pike said 4,500 homeowners would have to object to prevent the City Council from adopting the rate increase. He said such a large-scale objection was unlikely.
“There isn’t any other option, and I think a lot of people understand that. The regional water board is dictating what we do,” he said. “Sometimes you have to bite the bullet, and this is one of those times.”
The City Council recently detailed its plan to pay for the sewer by raising sewer rates 165 percent by 2009. Sewer rates would fund 54 percent of the project while new development and construction would pick up 46 percent of the costs. The city will have to float $120 million in bonds to pay for the project, which will end up costing more than $330 million after interest on the 30-year bonds is repaid. The sewer plant is expected to reach capacity in 15 years, at which point it would need to be expanded, according to Hollister City Manager Clint Quilter.
Monthly sewer rates are determined by the city council. However, a majority protest by the city’s 9,300 commercial and residential property owners could block the council from approving the planned rate hikes. In order for the protest to be valid, it must be submitted in writing to the city clerk before today’s public hearing.
The state placed a moratorium on new sewage connections in Hollister after 15 million gallons of treated wastewater spilled into the San Benito River in 2002. The moratorium, which has brought new construction and development to a virtual standstill, has hurt the city’s economy.
The sewer project will be paid for with money generated from selling bonds. Since the city will not be able to use impact fees from new construction to cover the bonds, officials have created a plan that uses sewer rate increases and future impact fees to complete the project.
Under the new rate schedule a single family residential water bill will increase 165 percent in the next five years, jumping from $31.30 a month to $124.40 a month by 2009. The increasing rates will be introduced incrementally, starting with a 48 percent hike this year. However, city officials hope the plan doesn’t have to implement the full rate increase, anticipating that impact fees from new development once the moratorium is lifted will cover nearly half of the plant’s construction costs. If that assumption holds up, the sewer rate increase would be significantly less drastic, with the monthly rate climbing to $71.50 by 2009 instead of $124.40. Assumptions aside, the city council will have to approve the new sewage rate scheme to demonstrate that it can generate enough revenue to satisfy the bonding company.
Brett Rowland covers public safety for the Free Lance. He can be reached at 831-637-5566 ext. 330 or br******@fr***********.com.
