Council talks rate increases (February 17, 2016)

Due to restructuring, bills for 91 percent still decrease under plan

VICTORVILLE — After a 90-minute special session Tuesday, the City Council recommended raising water rates 6.25 percent for four straight years beginning July 1, 2017. Under the plan, however, about 91 percent of the city’s water district customers will see lower bills, according to a consultant.

The reduction was a focal point for city officials, who credit underway rate restructuring for the majority bill decrease despite the proposed hikes. The Victorville Water District will be shifting from a tiered-rate system to a fixed methodology.

According to documents prepared by consulting firm NBS, nearly 32,000 customers right now with a ¾ -inch meter pay $18.25 monthly for an average daily water use of up to 1.17 hundreds of cubic feet (HCF). After five years, in a proposed plan more hefty than the one recommended by the Council, those customers’ monthly bill would be $15.93.

The five-year rate plan being pushed by city leaders will result in no rate hike for fiscal year 2016-17. It’s a half-decade strategy that will fully cover $55.6 million in planned capital improvements and draw down replete district reserves from $30 million to the targeted $10 million, consultants said.

The proposed five-year rate schedule will factor into the Proposition 218 process and has to go before a public hearing before it can be adopted.

Council members appeared at times to struggle with recommending hikes with $30 million on hand and a capital improvement plan that hasn’t always spent as much as it set out to spend. This fiscal year alone, only $6.5 million of the budgeted $9.5 million in planned upgrades will be expended.

But with projects regularly stretching into other fiscal years and slow to get off the ground, City Engineer Brian Gengler said that the city’s recent conversion to outsourcing more projects should make the $55.6 million plan feasible. About 77 percent of the budget is for upgrades to old pipelines.

Yet even with Gengler’s vow, the Council agreed to revisit the planned rate increases each annual budget session to determine whether the capital improvement plan and district general standing justified the full rate hike.

‘I still wonder if you can spend the money you say you’re going to spend in any given year,’ Councilman Ryan McEachron told Gengler.

The Council has the discretion each year not to enact the full scope of the proposed 6.25-percent hike even if it’s been marked on the rate schedule, officials said. Instead, the Council can lessen the increase or execute no hike at all.

Tuesday’s review comes after a similar workshop was held last month. NBS had warned the city that its water district would deplete reserves by 2020 without a rate increase, but city officials rebutted then that they would simply cut back planned capital improvement projects before it got to that point.

Source: Shea Johnson, Daily Press