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Yahoo
04-05-2025
- Business
- Yahoo
Our View: Sewer fees: Heed lessons from rate increase outcry
Public outrage over Bakersfield City's ham-fisted approach to raising the city sewer fee 300% in July — from $239 to $950 a year — prompted City Council members last week to abruptly withdraw the proposal. But city officials now must ask: How can we: • Finance Bakersfield's sewer and water system improvements, without suddenly sticking the tab squarely onto the shoulders of residents? • Convince residents that we are good stewards of the city's tax dollars? • Create a way to anticipate infrastructure needs by setting aside more appropriate budget reserves? Council members and city officials have a lot of explaining to do. How were critically important systems allowed to deteriorate, without sufficient money set aside to improve or replace them? During their March 26 meeting, enough City Council members voted to send property owners notices that the annual sewer fee would increase from $239 to $950 and the monthly water fee would increase 50.8% in phases — jumping 34% on July 1, 2025; 6% in fiscal year 2026-27; and 2.4% in 2027-28 and 2028-29. The monthly residential bills would rise from $43.46 to $54.94 this year and eventually to $64.72 by the final year. To be fair, not every council member voted to send the notices, and the vote on sending the sewer notice was not the same as for the water notice. Proposition 218, a California law voters passed in 1996, requires the city to notify residents of potential rate increases. If more than 50% oppose, the increases fail. Even if sufficiently supported, the final rate decision rests with the City Council. Because the public outrage over the sewer fee hike was so quick and loud, council members at last week's meeting directed staff to withdraw the proposal. A formal vote is expected at the council's May 14 meeting. However, there was no mention of the water rate increase. It is unclear if that rate increase also will be withdrawn. In a recent Californian Community Voices article, Councilman Andrae Gonzales explained Bakersfield eventually must significantly upgrade or replace — at a cost of more than $500 million — its 70-year-old Sewer Treatment Plant 2. Sewer Treatment Plant 3 will operate at capacity by the early 2030s. South Bakersfield development may require yet another sewer treatment plant. The city's sewer system is funded through an 'enterprise fund,' not general tax dollars. The fund, which is supported by business and residential fees, is separate from the city's general fund and cannot be used for other city purposes. According to city officials, the proposed water rate increases are needed to fund a $72-million, 10-year infrastructure maintenance and expansion program. 'Bakersfield continues to grow, and our infrastructure is a permanent obligation,' wrote Gonzales. 'Over the last 30 years, the city chose to keep rates low and make the most of limited resources. But patch jobs only last so long. Eventually, you reach a point where delaying investment costs more than making it.' In his Community Voices article, Gonzales suggested a good alternative three-part strategy: • Modestly increase Bakersfield's sewer rates over the next five years, rather than increasing them to $950 in July. Align Bakersfield's rates with the lower ones charged in neighboring cities. • Allow the city time to seek additional professional opinions on how to grow reserves, and explore cost-saving options for improving or replacing Sewer Treatment Plant 2. • Use bonds to help cover improvement or replacement costs, but at a level that will not jeopardize other capital projects. A more modest sewer rate would require some bonding to fund capital expenses. The enterprise fund now includes two revenue bonds issued in 2007 to help finance Treatment Plant 3 improvements. The issuance of new bonds could be timed with the payoff of existing bonds in 2033. And as the furor over the recently proposed massive rate increase demonstrated, Bakersfield city officials also must work collaboratively with the community.
Yahoo
28-03-2025
- Politics
- Yahoo
City moves forward with proposed sewer, water rate increases
Notices will be sent to thousands of Bakersfield residents next month informing them of the process by which they can protest a massive increase in water and sewer rates proposed by the city. Faced with significant costs to update water and sewer infrastructure, city officials have proposed increasing water rates by 50% over five years and sewer rates by nearly 300%. If approved, the rate changes would go into effect July 1. The increase would impact roughly 166,000 people, or 50,000 households, said city spokesman Joe Conroy, and 106,200 parcels will be sent notices regarding the sewer increase. Water rate notices are expected to go out April 25 and sewer notices April 11. The city's water system serves about 40% of Bakersfield's population, with the remainder served by CalWater or smaller water providers. After extensive debate Wednesday evening, the Bakersfield City Council voted to send notices to customers regarding the rate increase as required under Proposition 218. Proposition 218 is a 1996 law that requires local governments to receive voter approval for tax increases and says that a public hearing must be held within 45 of notices being issued. If more than 50% of voters object to a rate increase, it can't be adopted. Following motions approved Wednesday, protest hearings on the water rates will be held at the council's meeting at 5:15 p.m. May 28, and June 11 for the sewer rates. Written protests can be submitted to the City Clerk's Office during regular business hours through the dates of the hearings. The rate increases had been recommended by the city's Water Board, consisting of councilmembers Manpreet Kaur, Bob Smith and Andrae Gonzales, at a meeting earlier this month. The council spent more than an hour debating each item Wednesday, and ultimately voted to move ahead with rate increases. The decisions weren't unanimous. Ward 1 Councilman Eric Arias was the only member to vote against sending notices for the water increase and both he and Ward 2 Councilman Andrae Gonzales voted against sending notices for the sewer increase. Ward 4's Ken Weir and Ward 7's Manpreet Kaur were both absent. Ward 5 Councilman Larry Koman put forward a motion that would have returned the water rate proposal to a consultant for reevaluation, a process city staff said would take at least six months. That motion failed to pass with only Koman and Arias voting in favor. Council members and staff repeatedly said the decision to raise rates was not easy, but noted Bakersfield ratepayers pay significantly less than other comparable cities. Furthermore, a series of state-mandated water quality and conservation measures will require the city to make significant upgrades to its infrastructure in coming years. City staff developed a 10-year master plan to bring the city into compliance, said Kristina Budak, director of water resources, adding that the proposed increase would keep the city's financial reserves healthy. "This allows us to stay above our target reserve," Budak said. "(It) ensures that we have a healthy fund moving forward to address any concerns or issues that are not identified in our 10-year plan." City Manager Christian Clegg said there is a structural imbalance. "We're spending more than we're bringing in every year," Clegg said. "And in the next two years, we will spend all of our savings down. And by fiscal year (2028), we won't have enough money to pay for operations." Council members acknowledged the impact on residents, but also said if the city waited, the cost of improvements would rise. "The other consideration is it only gets more expensive the longer that we wait," Gonzales said. "So the capital expenditures only, it doesn't get less expensive, it gets more expensive to actually construct some of these projects, and, again, we can defer it, but we will be paying more in the future." But if the city moves ahead with its sewer rate increase, it's going to be too late for Kern County to hold its own Proposition 218 hearings by July 1 for the 600 or so county residents impacted by the change. That means without approval from its residents for a rate increase, Kern County will have to make up the difference out of its own funds for a year. "I can't put that fee on the county people because I would also have to do my own Proposition 218 (hearings) and allow them the voice to protest out of that fee as well," said Joshua Champlin, director of Kern County Public Works. Speaking to The Californian, Champlin said he wouldn't be able to get that done before July 1, meaning the increase on the county side wouldn't be reflected until the next fiscal year. About 600 customers in an area of unincorporated Kern County receive city sewer services under an agreement between the two governments. "It says in the agreement that the county shall pay the current city rate for all of its users. So it doesn't, it doesn't say there's any allowance for this in our agreement," Champlin said. "It doesn't say we can pay less if our people don't pay it. It just says the county shall pay them at the same rate that the city charges their people." The issue has come up before but in lower amounts, Champlin said, but because of the size of the increase he estimated the county would have to make up more than $400,000 in costs. Champlin commented on the increase at Wednesday's meeting, where he asked the council to put off the item so it could be discussed further between the city and county. But the city is on the same deadline to get the increase on its own tax rolls before July 1, the start of the fiscal year. In voting against sending out the notices, Arias said there were large cuts being planned at the federal level that will impact families in the coming year, and that the timing of the increase troubled him. "We have to do everything that we can at the local level to help folks literally survive and fight for the next day," Arias said. "It's very clear that we need to update the sewer plant. I just don't know that now is the time."
