Utility looks to rate increase | TahoeDailyTribune.com

Utility looks to rate increase

Susan Wood, Tahoe Daily Tribune

The South Tahoe Public Utility District may ask its users to go with the flow of inflation when it decides on a new water and sewer budget that may involve nominal rate increases with planned improvements.

The budget, totaling $37.3 million, with two-thirds allocated to the sewer department, is expected to be voted on May 16.

The first alternative calls for a 2-percent increase in sewer rates that would bring the bill of a typical residential customer to $72.43 per quarter. The monthly change for a user with a kitchen and up to two bathrooms amounts to 47 cents.

Water rates may also go up 2 percent, making the typical bill $99 per quarter; that’s an increase of 65 cents a month. A typical user is defined as a single family home.

STPUD has elected to spread out minimal rate increases over the last three years, instead of mushrooming flat rates after a long hiatus.

However, the idea of even nominal rate hikes didn’t sit well with South Shore resident John Cefalu, who addressed the board during its budget proposal meeting last Thursday night.

“I think this district has to show some compassion in what’s going on around (it),” Cefalu said.

He referred to people with fixed incomes who may have trouble adding this utility rate increase to the others Tahoe residents have been asked to pay recently.

Cefalu objects to the collective effect of utility rate hikes.

“This is nominal, by itself, but when coupled with everything else, it’s hard to do,” he said.

Service rates for Avista Utilities, Charter Communications and Sierra Pacific Power have all gone up in the last year; the latter has two more proposals pending.

But while going over expenses in each line item ranging from cost-of-living adjustments to a wearing infrastructure, STPUD Chief Financial Officer Rhonda MacFarlane stressed that the rates are based on the cost of service.

The wastewater treatment plant alone has $4.4 million in planned improvements on the table.

“I think it bodes well they’re under 2 percent,” she said of the residential rate proposals.

On the first alternative, STPUD suggests sewer commercial rates, including restaurants, go up 2.9 percent, lodging establishments 1.4 and mobile-home units 1.3.

For commercial water customers, rates could increase 1 to 3 percent.

It’s unclear which way the board will ultimately lean.

STPUD board Chairman Duane Wallace said he doesn’t feel the district is operating lean enough to justify rate increases, given people’s economic challenges.

“For us to take more than we need this year, I think, is the wrong thing to do,” Wallace said.

But board member Mary Lou Mosbacher mentioned federal mandates that dent the budget when new testing and engineering measures are required.

Eric Schaefer added to that concern.

“I sympathize with what you’re saying, but I think we’re taking the prudent course,” Schaefer said.

The district may receive a windfall of monies from the MTBE lawsuit it filed in 1998, but the intention is to designate that money for cleanup efforts; it’s already settled for $33 million, with the outcome of the penalty phase pending in court now.

An engineer has quoted the district at least $50 million for cleanup.

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