South Tahoe Public Utility District likely to seek rate increases
December 18, 2017
Property owners within the South Tahoe Public Utility District will likely be asked in 2019 to give their blessing on annual rate increases through 2023.
That question will follow an expected 6 percent increase to sewer rates and 5 percent increase on water rates in 2018 — increases that property owners signed off on in 2014, according to Richard Solbrig, STPUD general manager.
The STPUD board had expressed an interest in exploring future rate increases that, as Solbrig explained, would help the district stay on top of prioritized projects before they become problems, such as the line failure underneath Tahoe Keys Boulevard this past summer.
In the past, the STPUD board has set maximum annual rate increases for a five-year period, although it has the flexibility to approve annual increases as long as they don't exceed the maximum approved over five years.
The five-year process helps provide a more stable revenue picture for STPUD — the district's budget depends heavily on revenues from rates.
In 2014, the STPUD board approved annual increases of 6 percent to sewer rates over five years, and 6.5 percent annual increases to water rates over four years, with another 5-percent increase to water rates in year five, the Tribune previously reported.
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However, before the STPUD board can move ahead with approving a five-year rate plan, property owners must be given the opportunity to decide. This is due to Proposition 218, a 1996 measure limiting local jurisdictions' ability to raise revenues.
Assuming STPUD moves ahead with another five-year period of rate increases starting in 2019, it will have to notify property owners of the maximum possible increases during that time period.
If at least 50 percent of property owners plus one say they are against the increase, then STPUD is not allowed to move forward with the new rates and it's back to the drawing board, according to Solbrig.
Solbrig predicted the process in 2019 would likely unfold as it did in 2014, when STPUD staff recommended higher rate increases and the board, after factoring input from ratepayers, ultimately agreed to half of what was recommended.
"There will be a lot of public input even before the board has to decide what's going to go in … that notice that goes out."
When STPUD posed the question to property owners in 2014, around 2 percent voiced opposition, Solbrig said.
If the STPUD board decides to ask property owners for potential rate increases in 2019, the notification will likely go out in March of that year.