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Public Hearing: 13% rate increase proposed by Citrus Heights Water District

Citrus Heights Water District, rate increase
A Prop 218 notice informing Citrus Heights Water District customers of a proposed rate increase was sent out in September.

A public hearing will be held Tuesday night in the Rusch Park Community Center regarding a proposal to raise water rates and service charges by 13 percent — an increase the Citrus Heights Water District says is needed to cover infrastructure improvements and compensate for increased wholesale water costs.

If passed, the proposal would increase usage rates from 87 cents per water unit up to 99 cents per unit, beginning in 2017. Service charges for a typical residential customer with a 1-inch line would also rise to $72, up from the current $64 bi-monthly charge.

The District projects the increase will generate an additional $1.5 million in revenue next year, with CHWD’s current revenue of $12.5 million in 2016 coming almost exclusively from water rates to cover its operations.

CHWD Assistant General Manager Hilary Straus, who will replace retiring General Manager Bob Churchill on Friday, previously told The Sentinel his 34-employee District faces a difficult challenge to show ratepayers the need for capital investment in the District’s water delivery infrastructure, since much of the underground systems can’t be seen by customers. He said the District seeks to be proactive in repairing and replacing aging water mains to avoid “catastrophic failures,” and also seeks to operate on a “pay as you go” plan rather than incurring debt and paying interest.

A legally required Prop 218 mailer for the proposal says the rate increase is necessary to pay for replacing aging water mains, continue development of groundwater well systems, and install new meters that will provide “real time data” to help customers manage water use.

>>See the mailer: click here

As of Nov. 9, about 30 protest letters have been received by the District and are posted in the Nov. 15 meeting agenda packet. Many said they were senior citizens living on a fixed income and were largely concerned about the fixed service charge rising to $72.

“I really don’t mind paying for the water I use,” wrote resident Agnes Willis in her protest letter, noting recent bills showing she was charged no more than $12 for actual water use. “But when I have to pay $63.98 before using one drop of water [that’s] outrageous.”

Another resident called the increase “elder abuse,” and others questioned “constant” rate increases for infrastructure improvements.

The proposed increase follows a three percent increase approved in 2014 and a 14 percent rate increase last November. In raising rates two years ago, a District mailer said it was following a recommendation from a 2013 Water Rate Study conducted by the Reed Group, which recommended “a 3% increase each year through 2018 to prevent the need to issue debt to cover infrastructure maintenance and replacement.”

>>From 2015: Proposed water rate increase would affect most Citrus Heights residents

Despite increases, Citrus Heights Water District consumers still pay about 15 percent less than the regional monthly average water bill, according to a District survey. Orangevale Water Company has one of the lowest bi-monthly service charges of $28 for a 1-inch line, while Fair Oaks Water District has had a higher $65 service charge in place for the past three years, but also a cheaper per-unit cost of just 45 cents per 748 gallons.

Bret Daniels, who won election to the city council last week and ran for CHWD director in 2014, said he is strongly against the proposed increase and believes the District should be looking at cutting costs internally before seeking to raise rates.

Daniels cited data from the website Transparent California, which reflects public employee wages and benefits reported on the State Controller’s Office website. The numbers show CHWD’s general manager was paid $218,000 in total wages last year, with benefits adding an additional $64,000. The District’s Operations Manager is shown having total pay of $239,000, with an additional $34,000 in benefits.

>>Share your thoughts on water rates: click here to submit a letter to the editor

Jayna Karpinski-Costa, who heads up the Sylvan Old Auburn Ranch neighborhood association, said she was in support of the rate increase, as long as the money wouldn’t go towards salaries and would keep the District from having to go into debt to pay for future infrastructure improvements. She said the District’s assistant general manager recently gave a presentation to her neighborhood association regarding the proposal.

If passed by the District’s three-member board of directors, the increase will affect about two-thirds of Citrus Heights residents. About a third of Citrus Heights residents are served by neighboring water districts and will not face the proposed rate increase.

The public hearing will be held on Nov. 15 at 6:30 p.m. in the Rusch Park Community Center’s Sunrise Patio Room. The park is located at 7801 Auburn Blvd.

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