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Citrus Heights Water District approves 13% rate hike, despite protests

Citrus Heights Water District rate increase
Resident Larry Wright (left) speaks to Citrus Heights Water District Director Ray Riehle and Assistant General Manager Hilary Straus (right) about rate increases, after a Nov. 15, 2016 public hearing. // CH Sentinel

A double-digit water rate and service charge increase was approved by a 3-0 vote of Citrus Heights Water District directors on Tuesday night, despite receiving 39 letters of protest from customers opposed to the proposal. District officials said the additional revenue to be generated from the 13 percent increase is needed to cover infrastructure projects and compensate for increased wholesale water costs.

Beginning in 2017, customers will be charged 99 cents per unit of water used, up from 87 cents. Fixed service charges for a typical residential customer with a 1-inch line will also rise to $72, up from the current $64 bi-monthly charge. The District projects the new rates will increase revenue by about $1.5 million next year.

Although several dozen written protest letters were received prior to the Nov. 15 public hearing, only two people spoke at the nearly empty community room at Rusch Park. Ratepayer Larry Wright, a 44-year resident, said he was surprised more people didn’t show up and said the district should have been planning for infrastructure replacement years ago.

“It seems like government and agencies think they have the right to just go back to the people whenever they want saying ‘you gotta do this, you gotta give it to us,'” Wright told the board on Tuesday. “You need to start planning before now, and I know you don’t want to hear that.”

General Manager Bob Churchill replied to Wright that the 2017 budget laid out a plan “to do just what you’re suggesting,” referencing an allocation of $300,000 for a newly created water meter replacement reserve fund.

CHWD Assistant General Manager Hilary Straus, who will replace Churchill as general manager on Friday, said the rate increase will pay for replacing aging water mains, continuing development of groundwater well systems, and installing new meters. He said the District seeks to be proactive in repairing and replacing pipelines to avoid “catastrophic failures,” and also prefers to operate on a “pay as you go” plan rather than incurring debt and paying interest.

In voting for the rate increase and 2017 budget, Director Raymond Riehle said it was a way to “pay it forward to the next generation,” so others wouldn’t be stuck with the bill in the year 2030 — when the District says many of its water mains will have reached the end of their service life. His fellow board members, Caryl Sheehan and Allen Dains, also voted in favor of the rate increase.

Sheehan was reelected to a four-year term on the water district board this year, but her name did not appear on the Nov. 8 voting ballot, as no candidate filed papers to run against her.

A legally required mailer for the rate proposal was sent out to all CHWD customers in September, resulting in 39 written responses in protest to the increase. Many said they were senior citizens living on a fixed income and were largely concerned about the fixed service charge rising to $72.

>>See the mailer: click here

Several letters also urged the water district to adopt an assistance program based on income, but a legal memorandum provided to The Sentinel by the water district indicates state law currently “does not allow the District to offer a low-income rate program for customers, but that option may be available in the future.”

“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 District approved a three percent increase two years ago and a 14 percent rate increase last November. In raising rates in 2014, 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.”

Commenting on the 2013 study, the District’s incoming general manager told The Sentinel “we’re going to be revisiting that rate study” and said it operated on a “different set of assumptions” than the District has now.

Asked whether customers could expect another rate increase, Straus said “costs always go up,” but his goal is to do what he can to “smooth out those costs.” He also said the District isn’t in control of how much water wholesale costs will be, noting that CHWD’s supplier proposed raising wholesale rates by 16 percent in 2017.

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

Despite increases, Citrus Heights Water District consumers still pay a few 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 water unit.

Bret Daniels, who won election to the city council last week and ran for CHWD director in 2014, said he was strongly against the rate 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.

Straus argues that the District has been doing exactly what Daniels advocated, citing the 2017 budget that cuts one manager position entirely. When Straus takes over as general manager, his position of assistant general manager will disappear and not be replaced. The 2017 budget shows a 33 percent drop in management costs listed on the budget, but an overall rise of 4.1 percent in District employee salary and benefits.

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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.

The increase will affect about two-thirds of Citrus Heights residents, as about a third of Citrus Heights residents are served by neighboring water districts and will not face the proposed rate increase.

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

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