Berkeley officials approved a five-year sewer fee rate hike Tuesday night, and now it’s up to property owners to determine whether it will stick.
One thousand gallons of water currently costs about $4 to use in Berkeley for the average single family home. Beginning July 1, that same amount of water would cost about $6, an increase of 46%. By 2020, 1,000 gallons of water would cost $9.55, a 130% increase over the current rate.
The city says it needs to increase fees for sewer service to close a projected gap in the cost to run its sanitary sewer system and comply with federal mandates to improve the system in coming years. The rates take into account decreased water consumption during the drought, which staff believe will help moderate the amount property owners ultimately pay. Staff plan to return to council annually to report on system costs and fees, which council could potentially reduce if the city finds it is bringing in more money than it needs.
The unanimous Berkeley City Council vote Tuesday triggers a Proposition 218 process, which requires voter approval by property owners before local governments can increase certain fees. The city plans to mail notices to property owners this week, set to include a “protest ballot.” Ballots must be cast by June 26 by a majority of property owners to stop the increase, which otherwise will go into effect July 1.
In March, staff presented a proposal to council with several options for the fee increase. Tuesday night, staff presented a revised proposal in line with Gov. Jerry Brown’s recent executive order mandating a 25% reduction in water use throughout the state. That’s because sewer rates are based on water use. If less water is used, the city must charge a higher fee to make up the difference, since the city’s costs don’t decline with lower usage.
Council voted unanimously for “option 1,” presented in the chart below, which assumes property owners will cut back water use by 25%, from about 9,720 gallons a month to about 7,300 (the usage rates shown in the chart are in hundreds of cubic feet). That would increase the bimonthly bill for the average single family home — assuming conservation targets are met — to about $44 in fiscal year 2016, which starts in July; $55 the following year; $63 the next, and up again through fiscal year 2020, when the average bimonthly bill is estimated to reach nearly $70.
If consumers don’t reduce water use by 25%, or if the state mandate lifts, bills would then be even higher. The city would, as a result, be likely to “over collect” fees, meaning it would bring in more money than it has projected to run and repair the sanitary sewer system. Council asked staff to return on an annual basis to keep it informed.
Council also considered a more moderate fee increase schedule Tuesday night, but officials said they preferred the option above because it will get more money into the sewer fund’s reserves. Under the schedule above, the fund balance is not slated to fall below $2.13 million at any point over the next five years, given the schedule of planned expenditures presented by staff. The alternate plan projected a diminishing balance down to $570,000 in FY 2018, and just $160,000 the following year.
Under that plan, which assumes higher average water usage, of 8,260 gallons, the fee per 1,000 gallons beginning July 1 would have been about $5.40. By 2020, the cost for the same amount of water would have been nearly $9, resulting in bimonthly bills for an average single family home of $73.70 (page 5). Councilman Darryl Moore spoke in favor of that increase — because “it spreads the pain out over the five years” — but council did not vote in that direction.
City Manager Christine Daniel told council members they would have the option to reduce fees “when consumption changes.”
But local resident Jacquelyn McCormick — the lone public commenter on the item — said she would have to see it to believe it: “I have yet to see a rate increase that reverses when things get better.”
Staff and officials alike said part of the challenge is that — perhaps counterintuitively — the less water people use, the more they have to pay per unit, because the cost to maintain the system does not change.
“If you’re using less, you have to pay more in order to keep the sewers functioning,” said Councilwoman Linda Maio, who described the data presented by staff as “a little bit hard to parse out.”
But she said, relative to nearby cities, Berkeley’s rates look like they will remain reasonable: “You’re not paying much more than others.”
The current cost to maintain Berkeley’s sanitary sewer system is nearly $18 million a year. By 2020, the city has projected costs to reach nearly $23 million annually.
That increase is largely driven by a settlement with the EPA regarding excess wet weather flows and facility discharges from the cities of Alameda, Albany, Berkeley, Emeryville, Oakland and Piedmont, and the Stege Sanitary District, which serves El Cerrito, Kensington and a portion of Richmond.
As a result of the settlement, according to the May 12 staff report, “Berkeley will replace an average of 4.2 miles of sewer pipeline annually for the next 12 years; replace noncompliant manholes; and perform regular condition assessment, spot repairs, and increased required maintenance activities.”
If property owners successfully protest the fee increase, staff has projected a revenue shortfall of $6.9 million in fiscal year 2015-16.
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Two op-eds argue Berkeley is going in wrong direction (05.12.15)
Water conservation gets serious with restrictions, fines (05.04.15)
Op-ed: How should water be priced in Berkeley? (04.23.15)
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