Council again postpones sewer surcharge increase, workshop Monday

May 10, 2013
Santa Paula City Council

The City Council agreed to a second six-month postponement for the highly controversial increase in the sewer surcharge fee - a move that stretched the suspension to one year, and one that will save ratepayers a city-calculated $600,000.

Finance Director Sandy Easley told the council at the May 6 meeting a study of reducing sewer rates is ongoing and a special workshop on rates will be held Monday. According to a written report by Easley and City Manager Jaime Fontes, who was absent from the meeting, staff has been “diligently working to provide some relief towards these service increases including but not limited to the ongoing refinance efforts.”

The “refinance efforts” allude to the city’s wastewater recycling facility completed in June 2011. The approximately $60-million facility was a Design/Build/Operate/Finance project and the plant is privately owned by Santa Paula Water LLC, a partnership of Alinda Capital Partners and PERC, the latter which also built and operates the facility. 

At past council meetings buying out the plant using lower interest bonds has been mentioned, as well possibly refinancing the balance of the loan. At the end of the 30-year loan the cost of the facility will be about $125 million; the plant would then belong to the city. It would cost the city approximately $80 million to purchase the facility now. 

With its $77 flat rate, Santa Paula already has one of the highest sewage rates in Ventura County. The sewage surcharge is added to the basic rate, a structure questioned by critics who note that fees are based on all water usage, not only water that is processed at the sewage plant. 

Each drop of water that leaves a faucet, whether inside or outside the home, is subject to the sewer surcharge, implemented in November 2011 at 58¢ per 100 cubic feet. The surcharge was set to almost double to $1.12 per 100 cubic feet as of November 2012 before the council - faced with mounting criticism - postponed the increase.

Many have questioned why the $77-plus flat rate was implemented years in advance of projections, as well as why a water study to base sewer surcharge fees on actual household usage was never done. Ratepayers were told last year that postponing an increase in the surcharge would hurt the city’s credit rating, a stance later reversed. 

Easley told the council at Monday’s meeting that staff was also asking that the council authorize the continued review of the current water and wastewater rate study. The city has called for a special workshop to be held Monday, May 13, 6:30 p.m. at the Community Center, located at the corner of West Main Street and Steckel Drive. Easley said a second workshop is also being planned for May 29.

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