Water conservation efforts cited for impending rate hike

Water conservation efforts and increased operating expenses will result in a water and sewer rate hike for Winters residents.
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Five years ago, California residents were asked to conserve water by cutting their use by as much as 30 percent.

They did. And because of it, city of Winters residents will soon see an increase in their water and sewer bills.

“We didn’t anticipate the governor wanting a 30 percent reduction in water use, and everyone jumping on board and doing that,” Shelly Gunby, Director of Finance Management for the city of Winters, said at last week’s council meeting. “It’s been significant.”

Significant because the city covers operational costs and other expenditures with revenue it anticipates receiving from the regular use of water. With water consumption down, revenue has declined while operational costs have increased.

Earlier this year, Gunby formulated three different plans for recovering some of those costs and balancing the books. She presented the three options before the council meeting. All of them called for an increase in both water and sewer rates.

The options largely focused on utility bonds issued by the city. The first option would not change the repayment term or interest rate of current bonds. That option would see the highest increase in on residents’ bills: Sewer service would jump by $10.65 in 2018 with no rate increase in 2019, while water rates would increase by $4.61 in 2018 and again by another $1.96 in 2019.

The second option involved refinancing existing bonds to secure a lower interest rate while not changing the repayment term of 20 years. That option would result in an increase of $9.40 a month for sewer in 2018 with no increase the following year, and a water bill increase of $3.54 a month in 2018 and again by $1.99 in 2019.

Ultimately, the city council leaned more toward a third option: Refinancing the interest rate of existing loans while extending the repayment term by 10 years. The repayment term would be 30 years instead of 20, and residents would see their sewer rate jump by $7.04 a month in 2018 with no increase in 2019 and water rates go up by $1.37 a month in 2018 and $1.99 in 2019.

City Manager John Donlevy said option 2 was the most-favored by him because it showed “the discipline of staying within the existing term” while the other options ultimately costs the city more in the long-term.

Some council members agreed that the second option was more financially-responsible. But all wound up favoring the third option because it hit the pocketbooks of low-income residents the softest.

“When I look at option 1 of doing nothing, I think water conservation is here to stay,” City Council Member Jesse Loren said. “I just hear the growing older population saying I’m on a fixed income, and that’s the 7,000 people in our population at least 1,000 are in that age bracket. So as much as I think option 2 is the fiscally-responsible, I’m moving toward option 3 as one that would serve our population best.”

“A lot of this is totally out of our control,” City Council Member Harold Anderson said. “Unfortunately, the best choice of the three is option 3.”

Mayor Wade Cowan and City Council Members Bill Biasi and Pierre Neu agreed. The city council ended the matter with a motion for staff to come back with steps necessary to implement option 3 in the near future.

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