New Clovis water rates to have adverse effect on lowest users

Photo by Ron Sundquist – The city council chamber was packed on April 11, with many citizens present to protest the proposed water rate changes, which, while revenue-neutral, will raise rates for the lowest water users.

 

By Valerie Shelton, Editor

Some water conscientious Clovis residents will see a hike in their water bills, effective July 1, 2016.

At an April 11 meeting, the city council approved a new water rate structure in response to the recent San Juan Capistrano court decision. That case determined that, in accordance with Proposition 218, tiered rate systems that encourage conservation by offering lower rates to lower users are illegal, as they require heavier users to subsidize lower users. Following the court decision, the city of San Juan Capistrano had to pay out $4.1 million to reimburse higher water users who were overcharged.

While still tiered, Public Utilities Director Luke Serpa said the new water rate structure complies with the new interpretations on Proposition 218 and is defensible should the city come under legal fire.

The new water rates are touted as revenue-neutral, as the city will not have any monetary gains from the change, however, over a dozen water wise residents in attendance at the meeting say the rates are anything but revenue-neutral on an individual basis. The rates, city staff agreed, will in fact go up significantly for the lowest water users, remain steady for the average users, and go down for the heavy users—something council members and residents alike say is counterproductive to the city’s conservation efforts.

Prior to the council vote—which was required to be unanimous to pass, as councilmember Harry Armstrong was absent—the city clerk received 352 protest votes from residents against the rate change. With a total of 33,294 parcels in the city, 16,648 were needed to stop the council from voting on the changes.

Of the 352 residents who protested, several voiced their opinions at the meeting, describing the increases for lower water users as unfair.

Resident Jeanne Lovelace said she uses less than 9,000 gallons bimonthly in the winter and less than 10,000 gallons bimonthly in the summer. Under the new water rates, her bills will increase by nearly 80 percent.

“It may be neutral monetarily but you’re hurting the smaller users,” Lovelace said. “Increasing water rates to those with lower usage is nothing but castigation for conservation. We’ve reached conservation goals and now you are going to punish us. [Water usage] will never go back down now. By the same logic, someone who has a Prius should pay the same at the pump as someone with a motorhome.”

Residents like Lovelace who use only 10,000 gallons can expect to see an increase of $13.02 on their bimonthly water bills. Part of this increase is due to the fixed rate increasing for all users from $16.80 to $21.22. The other reason the increase has the biggest impact on lower users is that the first 10,000 gallons, which are free with the fixed rate on current bills, will now be charged per 1,000 gallons—this is something city staff say must be done to ensure that every resident pays a fair share and heavy water users will not be subsidizing others using under 10,000 gallons. Under the city’s new regular water rate structure, each 1,000 gallons (up to 23,000 gallons) will cost 86 cents. This combined with the higher fixed rate will bring Lovelace’s bimonthly bill from $16.80 to $29.82—a 78 percent increase.

And, under a separate emergency drought rate, which will most likely be the rate to go into effect July 1 unless the state relaxes its water conservation mandate, rates will be even higher for the lowest users because instead of paying 86 cents per 1,000 gallons, they will be paying $1.04 per 1,000 gallons.

Residents said this new structure effectively punishes them for conserving.

“To meet [the 36 percent conservation mandate] we basically killed our backyard lawn and because we did such a good job conserving, we are now going to have to pay more,” resident Joseph Gill said.

It goes beyond just using less water—some residents say they invested a lot of money in order to save. Almost all commented that they now have low flow toilets and showerheads. As a result of letting her lawn die, one resident said she has had to invest more in weed killers and insect sprays, as the dirt attracts more pests near her house. Some residents even went so far as to invest in drip irrigation or synthetic lawn, which can be very costly.

Resident Herbert Cruz said he invested nearly $12,000 to put in a synthetic lawn and didn’t even get a rebate in return. Now, under the new water rates, he will see a 30 to 35 percent increase in his bimonthly bills.

“I’m being penalized for conservation,” Cruz said.

Serpa said he doesn’t like having to recommend a new rate structure that dissuades people from conserving, but the city has no choice after the San Juan Capistrano decision.

“The new rate structure is as steeply tiered as it legally can be and still lie within the latest interpretations of the law, Proposition 218,” Serpa said. “Unfortunately, under this new rate structure lower water users bills will go up and higher water users bills will go down. That is counterproductive to conservation and it is nothing we would like to propose, but the San Juan Capistrano case ruled that you cannot have tiers just to promote conservation, they have to be closely correlated to the actual cost of those individual services and most of our costs are fixed and we could not justify as steeply a tiered rate as we had before.”

As for the drought rate, Serpa said that too is something they would prefer not to implement unless the city was running low on water, but whenever there is a “regulated drought” per the state mandate, the drought rate will need to be in effect.

“The drought structure is something new in Clovis,” Serpa said. “That will be implemented in circumstances like we are in now when the state is mandating cuts and there is an emergency at the state level or local level or in the unlikely scenario that we run out of water. We are not there, we have the water, but we are in a regulated drought right now. The drought rate structure is not intended as any kind of a penalty, it is not intended as a conservation incentive, it is only a redistribution of our costs over the lower volume of water that we will be selling. Again, most of our costs are fixed and when the volume goes down, the cost per unit has to go up in order to cover those fixed costs and that is what this does.”

Even under the drought rate structure, Serpa said the good news is that Clovis will still have the lowest water rates in the area, with the exception of Malaga.

Mayor Pro Tem Bob Whalen, who eventually made the motion to approve the new water rate structure, said he was troubled by the fact the new rates would deter, rather than encourage, conservation.

“It is counterintuitive in a drought scenario that we would be making changes at this time to comply with a decision that was made last year by the board of appeals that now causing us, at least in the eyes of some, to punish those people who are conserving water,” Whalen said.

Whalen also noted that the city of Clovis has been a good steward of the taxpayers’ money and of water, investing in infrastructure, such as the new wastewater treatment plant, and in water banking to ensure the city never runs out of water. To add insult to injury, he said these improvements actually make the cost of delivering water in the city go up, meaning that fixed rate on the water bills now has to go up.

Another facet of the new water rate structure residents weren’t pleased about is the ability the city council now has to raise the rate by 3 percent annually.

Council member Lynne Ashbeck said that the council will not abuse this 3 percent escalator.

“People are weary and nervous about giving government of any kind the ability to raise rates by 3 percent every year,” Ashbeck said. “I think it is important to note that our city has done a really good job. If we have the ability to impose a rate increase and we don’t need it, we don’t do it.”

Currently, the city has the ability to raise garbage rates by 3 percent a year, but in recent years the city has not used it and this past year, garbage rates were actually lowered.

The one positive about the new rate structure, for some, is that fines will no longer be imposed on those who don’t meet conservation requirements. Many conservative water users, however, were not happy about this fact either.

Many residents who came before the council requested that the city go back to the drawing board and come up with a rate structure that is “more fair.”

Consultant Douglas Dove said the new structure is the best he and city staff could come up with that meets the Proposition 218 standards.

“We worked on this for about six months and looked at a number of alternatives,” Dove said. “Believe me, we don’t want to increase the rates on low users, but with the state law Proposition 218, we have to charge the cost of service and we did a very detailed cost of service analysis and the proposed rates are based on that cost of service.”

To comply with the law, council members reluctantly approved the new water rate structure, 4-0.

“What has been a good thing for our citizens and frankly, for our usage of water, has been contrary to the law and we need to fix it because it is our obligation to fix it even though I don’t like doing it because I want to encourage conservation,” Whalen said.