City Council spars over new wastewater, water fee study contract

December 28, 2016
Santa Paula News

The City Council did some sparring over the water and wastewater fee study at the December 19 meeting where one member of the body said the issue has been studied before wasting city time, energy and money.

Finance Director Sandy Easley told the council that the study was the continuation of the one originally approved for NBS in 2013 — that study cost $69,000 — but action thereafter had been put on hold for various reasons including the purchase of the wastewater plant and the process of changing its operator.

The staff report noted that council action would also create a council ad hoc committee and the cost would include meeting with staff and City Council, reviewing the current rates and policies, and various analysis. 

The report said the proposal “also includes four workshops with the council and the public to receive general input and answer questions then to present the study results and make recommendations. 

“The study will develop supportable rates that meet revenue requirements, maintain healthy coverage ratios, and funding mechanisms for capital projects to ensure the long-term sustainability of the City’s water and sewer utilities.” 

During public comment Sheryl Hamlin addressed the agenda item noting, “Seventy-five thousand seems high” to allocate for the continued study. 

The way the city is studying the issue resembles “throwing darts at boards” and Hamlin questioned what impacts “inconsistent” figures in the city’s budget would have on the process.

Councilman John Procter also questioned if the timing is right with the O&M contract being negotiated.  

Easley noted that the estimated cost includes public hearings to garner input into potential cost increases for the utilities including connection fees, work started with the original 2013 NBS contract.

The city’s original plan in 2008 was “to have winter rates for the sewer component” geared more to payment for water amounts actually used that goes on for treatment versus overall water usage, a longtime complaint of ratepayers.

The new study would “kind of even it out,” she noted.

Councilman Martin Hernandez wondered about the “estimated timeline to hold these meetings and workshops, when that might be accomplished.”

And, “in regards of what happened in the past, it has unfortunately been stalled for various reasons. Lots of things changed numbers,” due to the purchase of the wastewater treatment plant. 

“It will take time,” said Hernandez, “to flush those numbers out.”

The consultants cost of $75,000 is “fairly reasonable,” for the work the continuation of the study will entail and Hernandez said, “I think they’ve done a good job up to this point. If we did do this I would like to serve on that ad hoc committee and, with Councilman Procter’s background in water, that he would serve as well.”

“I had a huge problem with this whole process,” said Vice Mayor Ginger Gherardi. “I’ve been sitting on council for two years and have no idea where we are at. I was told purchasing the plant was going to save us a lot of money,” savings that would be passed onto utility users.

“There’s been on change in anybody’s rates that I am aware of, we promised the public we would give them rebates,” and only one of a scheduled three has been allocated. 

“We have a new sales tax for the city,” with the passage of Measure T to benefit public safety, youth and roads and now, said Gherardi, “we’re raising fees, some at a significant rate.”

The council has not been informed on costs and other information and now would be expected to “explain to the public why we’re raising their rates…”

Gherardi said, “We should know what we’re doing before,” the public is involved.

United Water Conservation District had appeared before the council and explained its rate increase — a move with little impact on Santa Paulans — and Gherardi questioned why the public has not seen lower rates with the purchase of the wastewater treatment plant.

She noted that a majority of the council was not involved in city business in 2013 but several had been as members of the public.

“We have no summary in plain English,” of what occurred in the past, and staff “has not yet defined the problem at this point.

“I realize we had an ad hoc committee,” in 2013, “but it was a failure,” with no report ever back to the council and public.

Gherardi added, “This needs to go back to the staff and come back to us with the defining issues, where we are and what the questions are...I’m sorry I ranted on, I’m just unhappy with this.”

“If I’m not mistaken,” Hernandez said what Gherardi said is needed is what would be required of the consultant. 

Rates, he noted, “Can’t be changed whenever we want to, we can’t without a Proposition 218 vote,” and rebates funds had to be applied unanticipated expenses.

Hernandez said he would approve the continuation of the contract.

Said Procter, “This particular contract is from before my time but from what I understand the baton was carried through,” and he noted the council does not have “The particulars of the past contract. This was vetted by the council at the time,” but city staff does not have the ability to undertake such a study.

Hernandez asked several questions about the working of the public meetings and the Ad Hoc Committee but Gherardi noted, “In 2013 it was very different circumstances. We should be able to know what we paid,” where the city was at that point and where it was going with rates, and “We shouldn’t need a contract for that,” including recommendations made at the time.

Gherardi said council should direct staff to examine the issue, “define the problem and then give them direction.”

“This is probably one of the most complicated issues that the city faces,” said Hernandez.  

“One more comment then I’ll be quiet,” said Gherardi who noted, “There will be a point,” when the city will know how much money it needs to sustain the enterprises.

But, “Basically, the last public meeting was like moving the deck chairs on the Titanic,” and she urged that the council learn at least “where we are and how much we have” before “We spend $75,000 to move the deck chairs.”

City Manager Jaime Fontes noted Easley had shown him a chart that compared prices for the wastewater plant, “What the payments would have been under the old scenario and what they would be under the new scenario. We’re looking at a plant that went up for $60 million but ultimately would have cost $260 million compound interest going up,” a cost that would only be paid by the grandchildren of present ratepayers. 

“Refinancing it at about 4.2 percent interest rate lowered it quite a bit, the sequence of increases did not occur,” and Fontes said there has been substantial savings. 

“There would have been substantial pain, we eliminated that,” he added.

Noting the different utility funds Fontes said “There is a skill set required and number crunching is a professional skill set, there are guys that do this for a living.” 

“I understand it takes time to get this info to you and you review what you have before public meetings is a given,” said Hernandez.

“The complexity is way too much for us to take on in-house,” said Procter.

After more discussion Gherardi said “I am not opposed to having a professional firm make recommendations,” but she still would like to see the basics first.

She also expressed hope “The information,” including that mentioned by Fontes, “comes back to us in a written format and not only that we see it but the public also sees it. And, I think this is so important that everyone should be involved in it, not just,” a council Ad Hoc Committee.

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