Council: April eyed for launch of residents quarterly sewer rebate program
February 05, 2016
By Peggy Kelly
Santa Paula News
Instead of groaning Santa Paula residents will soon be smiling when they open their sewer bill and see they are receiving a quarterly rebate on their base sewer fee, a program expected to begin in April.
The City Council was updated about the program at the February 1 meeting.
The rebate would come just about a year after the city finalized a deal to purchase the long controversial — and expensive — wastewater treatment plant built using the Design Build Operate Finance (DBOF) model that put the plant in private hands.
The plant was purchased by the city for $70.8 million in April, slashing the former 8-plus percent interest rate by almost half with bonds. The city plans to refund residents some of the funds being saved with the lower interest rate and other expenditures.
Terry Maas of First Southwest, the city’s bond/financial consultant, told the council the city may be able to set aside about $3.2 million as a result of the purchase, funds that can be refunded to sewer customers but dependent on other financial obligations for maintenance, infrastructure improvements and chloride removal.
Even so, he noted, “We still should have plenty of money left over,” to give financial relief to approximately 6,600 customers that are now paying the $77 base charge.
Maas noted the council already has an ad hoc committee dealing with such issues that should tackle setting up a special Rate Rebate Fund and the full council could consider rebates every quarter.
Although the amount would vary, Maas said it could be a $20 a month credit with a $60 rebate each quarter, “So in April they would have a bill of only $17,” on the sewer base charge.
The amount he emphasized, would vary depending on certain needs and conditions: “Maybe there’s an extraordinary capital expense that comes up, there’s a huge spill that has to be paid for,” that Interim Public Works Director Brian Yanez had addressed earlier in the meeting.
With unforeseen maintenance and chloride regulation issues to be addressed, “You have to spend some money somewhere,” but the quarterly rebate plan, said Maas, “gives you the flexibility to manage that.”
The city also must make sure to protect their “Strong credit rating,” that Maas said is expected to grow stronger when the city goes through an operations and maintenance bid.
The result he added should lower such costs considerably and corrects an O&M contract that is viewed “negatively” by lenders.
Under the proposed plan and with the council’s final approval of same, residents would receive rebates in April, July, October and January.
“People stop me in the grocery store, ask me all the time,” when a rebate program would take effect said City Councilwoman Ginger Gherardi who asked for clarification on several points.
After more discussion Councilman Jim Tovias, who serves on the ad hoc committee with Mayor Martin Hernandez, said, “We must walk before we run, but we do nothing arbitrarily…”
“I think we’re in very good hands,” said Hernandez who complimented Maas and staff on their work.
Hernandez asked Finance Director Sandy Easley if the city’s finance software is up to the task and she assured him the rebate program would be handled effectively.
