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May 27, 2014
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Water, sewer rate decisions loom for South Tahoe

South Tahoe Public Utility District customers have about one more week to protest five years of proposed water and sewer rate increases, the first of which the district’s board will consider on June 5.

The board in March voted to mail out proposition 218 notices authorizing up to five years of 6 percent sewer rate increases and four years of 6.5 percent water rate increases followed by a 5 percent water rate increase in year five.

Those are maximum increases that would be allowed over the next five years unless a majority of the district’s water and sewer customers protest them. Even if the proposal clears the protest period, board members would still have to vote on any possible rate increases each year, starting with a first round that would take effect in July.

As of Tuesday, less than 2 percent of the utility district’s 13,900 water customers and 17,800 sewer customers have protested the proposed increases by mailing back their proposition 218 notices.

The rate increases are proposed to start making headway on nearly $59 million in sewer system upgrades and $70 million in water system upgrades targeted for the next 10 to 15 years.

District officials said it’s up to customers if they want to accept the higher rates to upgrade aging and inadequate utility systems or accept the risks of further delaying the needed work after years of rate increases that have barely kept pace with inflation.

“The thing a lot of people don’t understand is that we’re a public agency, which means the public is the owner. It’s their system,” General Manager Richard Solbrig said. “Do they want to run the risk of failure and put costs off for a while, or do it a little faster to minimize risk and get things built sooner?”

About 2.7 percent of proposed water rate increases is to accept and pay back a 20-year, zero-interest loan from the state of California to install water meters on about 8,000 homes that do not have them.

California law requires utilities to be metered by 2025. With the subsidized loan, that work is anticipated to take five years to complete and cost the district about $21.5 million. That compares to an estimated $34.5 million price tag if the district had to seek private financing at a 5 percent interest rate.

Other projects would upgrade water tanks and eventually replace about 135,000 feet of undersized water lines. About 10 to 15 percent of the utility district cannot flow enough water to meet fire protection standards. That entails about 1,500 homes and is something the district wants to fix before another wildfire like the Angora Fire, which impacted an area where water lines and tanks were already upgraded.

“We got commended by the fire departments that they never ran out of water. We had everything turned on and pumping and they took every drop we could give them but had enough water,” Solbrig said. “There will be another big fire in the Tahoe Basin at some point. The longer you take to finish the job, the higher the risk of ending up with a fire in an area where you are not adequately protected.”

Members of the district’s board already scaled back proposed water rate increases and the timeframe for upgrades.

District staff had proposed water rate increases of 9 percent and 9.5 percent over four years and 5.5 percent in year five. That was rejected by board members Chris Cefalu, Randy Vogelgesang and Kelly Sheehan, who said it was too much for customers to absorb. Board members Jim Jones and Eric Schafer supported the staff proposal, arguing that delaying the upgrades will only increase their cost and cause customers to pay more for them in the future.

Proposed sewer upgrades would replace 50-year-old motors, electrical controls and electrical transformers at the Luther Pass pump station, a facility pumps millions of gallons of treated wastewater out of the basin each day as required by law.

A new backup generator would be installed at the treatment plant to meet new California air quality standards and ensure sewage can continue to be treated and exported in the event of an extended power outage.

Other projects would upgrade electrical controls and sewage lift stations in the Fallen Leaf Lake area and continue development of the district’s Harvey Place Reservoir and Diamond Valley Ranch in Alpine County. The district is developing the ranch as place to dispose of its treated wastewater, which is stored in the reservoir, so that it does not have to rely on just six ranches to accept the recycled water.

The formal proposition 218 protest period is required by California law. It follows months of public workshops and presentations on the requested water and sewer rate increases and targeted system upgrades.

“No one wants to pay more for services, so we’ve been going through an aggressive outreach campaign trying to give the public a lot more opportunity to understand what would be literally built with any extra money we ask for,” Solbrig said. “These are very important, very intensive, multi-year projects we’re talking about, the heart of our water and wastewater system.”


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Tahoe Daily Tribune Updated May 27, 2014 08:20PM Published May 27, 2014 06:48PM Copyright 2014 Tahoe Daily Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.