STPUD to consider rate increase for adequate fire protection and pipe replacement

SOUTH LAKE TAHOE, Calif. - Customers of the South Tahoe Public Utility District (STPUD) may be looking at an annual increase on their water and sewer bills of 5.0 to 8.5 percent to cover costs of replacing aging infrastructure and enhancing local fire protection.

During last week's budget workshop, STPUD staff showed the Board what a rate increase could provide to their customers:

- Replacement or rehabilitation of 725,354 feet of steel pipe, water mains, wells and tanks

- Extension of the life of assets
- Replacement of 100,000 feet of pipe used for fire protection
- Installation of fire hydrants
- Construction of booster stations

During their 2:00 p.m. meeting on March 21, the STPUD Board will hear more from General Manager John Thiel on their Capital Improvement Program, rate impacts, and issuance of a Proposition 218 notice for a rate increase.

The current water system challenges include:
- A system that is 50-60 years old
- Leaking steel pipes
- 54 percent of water mains are on the old steel pipes which will take $253 million to replace. It would take $5M a year for 50 years to replace them all.

At the workshop, District staff highlighted the fact that the entire community is at risk with the current fire protection. At this time, 10 percent of the STPUD service area has insufficient fire flow and/or access to a fire hydrant. The map pictured above shows which parcels in the STPUD boundaries have sufficient fire hydrant access (green) and which parcels do not (pink).

If the Board decides to go ahead with a rate increase of 5 percent, single-family residential customers would see their current sewer rate of $40.09 per quarter per billing unit go to $44.46 in 2020, $46.68 in 2021, $49.02 in 2022, $51.47 in 2023 and $54.04 in 2024.

Water rates under the same increase are calculated differently depending on the size of the pipes, but for a single-family home with a 3/4-inch-diameter pipe, the current base rate is $140.90 per quarter plus a commodity charge of $1.09 for up to 45 cubic feet of water or $1.64 for over that consumption. In 2020 those figures would be $140.06, $1.57, $2.40. By 2024 they'd be $170.24, $1.91, $2.91.

STPUD rates are currently below the average of all water agencies in the Lake Tahoe Basin, and even with proposed increases they'll remain below the average. North Tahoe Public Utility District is facing increases in their water and sewer rates as well. Currently, the Squaw Valley water district charges the most, with Incline Village the least for water rates. Northstar water district and Incline Village pay the most on sewer rates in the Basin, with STPUD below average on those charges.

If the Board votes to pursue rate increases, STPUD will start the rate setting and implementation process including public noticing required by Proposition 218, with a hearing date of May 16. 2019.