Utility district to roll back planned rate increases | TahoeDailyTribune.com

Utility district to roll back planned rate increases

Patrick McCartney

Citing the economic damage caused by the closure this winter of U.S. Highway 50, the South Tahoe Public Utility District is proposing to freeze sewer rates and to cut by nearly half a planned increase in water rates.

In unveiling a proposed $19 million budget Thursday, the district’s finance committee recommended dropping $565,000 in already-approved rate increases for the fiscal year that begins July 1.

The district’s board of directors will conduct a public hearing on the budget at its first meeting in May, with a vote on the spending plan scheduled for the following meeting.

The rate increases were to be the first in a planned five-year rate adjustment needed to pay for nearly $50 million in improvements to the district’s water system and wastewater export line.

The district proposed the rate modifications despite incurring an estimated $1.25 million in costs to repair facilities damaged by the New Year’s Day flood. Rhonda McFarlane, the district’s finance officer, said it was the economic blow to the basin by the flood that prompted the board’s finance committee to suggest giving ratepayers a break.

“The decision was in response to the woes our community has faced with Highway 50 being closed and the economic harm it caused,” McFarlane said.

In the proposed budget, the district is recommending dropping the 3.5-percent increase in sewer rates, freezing the residential rate at $63.72 a quarter.

The freeze would not affect the planned 3.5-percent increase in each of the following four years.

At the same time, the district is recommending cutting the planned 6-percent increase in the residential water rate to 3.5 percent, increasing the current $81.85 quarterly rate by $2.85.

Under the rate adjustment plan adopted last year, water rates will continue to increase 3.5 percent a year for another four years.

McFarlane said the district largely achieved its goal to freeze or reduce its operations and management costs, registering a $13,000 cut in water operations. While the district reduced payroll expenses by $21,000 for its sewer operations, the cost of storm damage and increases in power costs and spending to solicit grants raised the budget of sewer operation by nearly $1 million.

The proposed budget calls for the district to spend $12.2 million for sewer operations and capital improvements in the next fiscal year, and $6.7 million for water operations and improvements.

The district provides sewer service to 16,500 customers and water to 12,000 customers.

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