City Council Sits Through Third Water Rates Workshop

The look of displeasure was obvious on the faces of two councilmen up for re-election (Ted Hickman and Scott Pederson) and was echoed in their expressed sentiments from the dais. All but Steve Bird questioned the assumptions and graphical representations of an alleged 266% rate hike spread out over four years from 2019 to 2022. The rate hike is needed to fund the consultant’s recommended $11.5 million bond in 2020 and another $5.8 million in 2022.
Representatives from Raftelis, the water rate consultants, include their “associate” Bob Reed of the Reed Group. Reed has been part of past rate studies including one around 2000 when the city’s water system was flush and rates were reduced. No planning for future replacement costs and the loading of the water enterprise fund with city staff salaries, such as 16% of the city manager’s salary, emptied the coffers to the point where supposedly no money was available to do even minor repairs.
The city’s water system is separate from the water system run by California Water although there are interlinks in case of emergency needs of one system or the other to supply water. The city took over the system from Solano Irrigation District in 2014 amid charges of over billing and shoddy work. It has also been contended that SID used sewer pipe for conveying water to some users.
Rates were more than doubled in 2014 by 110% to fund future rehabilitation work and make the system financially healthy. City water rates are substantially lower than Cal Water’s and even after the proposed 85% increase in 2019 still would be 25% lower.
The question which remains is what happened to the $700,000 per year in extra revenue generated over the last 4 years. Staff contends it was spent on emergency repairs but they have yet to describe those repairs in detail or what they were at all. Government transparency is a myth and a pipe dream of tax payer groups.
Scott Pederson, who is running in District 1, attempted to ask the question of “what is the total cost of borrowing the $17.3 million?” The speaker, who did not identify herself, didn’t answer the question.
Instead, Michael Ceremello, who is running against Pederson and who has a background in finance as does Pederson, did. Ceremello pointed out that you normally spend three times what you borrow to pay back interest and principal just as you would when financing a house. “You are essentially throwing $34.6 million in the street and wasting it”. It appears that both Pederson and Ceremello are in agreement this isn’t the best solution.
During Ceremello’s pointed contribution, he asked if the consultant had taken into consideration additional hookups defraying the costs when the Southwest begins development. He asked why there was no examination of “operating costs” and questioned the necessity of the projects where city staff has not gone into detail. Ceremello also called the consultant on saying this was a 266% increase when their own charts showed a $28 bill going to $99 which is more like a 330% increase. All of this was greeted by silence and a quick exit by the council into a closed session.
The public needs to start letting the council know how they feel. SID, for all their warts, used a different plan which was pay in cash with accumulated capital. As with street repair and business recruitment, there has to be a plan. If there is one thing which has been absent throughout any of these processes, it is a coherent plan.
Simply having a plan is not enough. The $3 million Pardi Market debacle is a good example of this. Throwing money at any problem is not a solution except for a government which uses other people’s money carelessly and in an uncaring manner. There will be additional workshops held at as of now undisclosed dates.

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