STPUD starts process to raise water and sewer rates

SOUTH LAKE TAHOE, Calif. - South Tahoe Public Utility District (STPUD) will start the process to raise water service rates by up to six percent and sewer rates by up to five percent in order to start replacing aging pipes and providing improved fire flow throughout their service area. If fully implemented, this increase would fuel an $81.5M capital improvement program for sewer improvements, and $70M for water system improvements, especially fire flow projects.

During Thursday's STPUD Board of Trustees listened to scenarios on how long it would take to replace and rehabilitate 725,354 feet of steel pipe, water mains, wells, and tanks and install over 100,000 feet of larger 6- and 8-inch waterlines and over 200 hydrants for improved water protection.

The following are rough estimates on four different water rate increases based on conservative cost estimates:

If there was an 8.5 percent increase it would give the district $105M to invest in replacing the pipes and it would take 38 years to complete the project, and $67M to invest on improving fire protection, a project that would take eight years to complete.

If there was a 7 percent increase it would give the district $88M to invest in replacing the pipes and it would take 50 years to complete the project, and $50M to invest on improving fire protection, a project that would take ten years to complete.

If there was a 6 percent increase it would give the district $70M to invest in replacing the pipes and it would take 65 years to complete the project, and $39M to invest on improving fire protection, a project that would take 12 years to complete.

If there was a 5 percent increase it would give the district $60M to invest in replacing the pipes and it would take 100 years to complete the project, and $26M to invest on improving fire protection, a project that would take 20 years to complete.

"Fire flow projects are a large part of the total investment," said STPUD General Manager John Thiel. "Most of these projects are in the planning stage and adjustments will be made to prioritize fire flow projects so that they are actually completed in the next ten years or less."

The Board is tasked with striking a balance what is needed and what the community can afford.

There was discussion on how a rate increase would affect those with lower incomes and tight budgets. There is a program in place already that gives low-income households a 20 percent discount on their bills, a percentage that may be raised to 25 percent. Currently, the discount is only good for homeowners who pay for water and sewer and the District will look into opening that discount up to tenants who are charged for the same.

"The Board is committed to making the needed water system improvements within ten years to provide adequate fire flow throughout the entire STPUD service area," said Thiel. "By prioritizing and streamlining fire flow projects, we will absolutely complete this in ten years or less under the six percent plan."

During the public comment period, one resident said she wanted the highest rate increase to help protect the community in the quickest manner and prevent another Paradise, California fire situation. Another asked the Board to give Vacation Home Rentals and lodging properties a higher rate than locals, something that is prohibited. One customer cannot subsidize another.

Lake Valley Fire Protection District (LVFPD) Battalion Chief Brad Zlendick addressed the Board and told them the fire department needs more water flow to effectively fire fires. At this time there are many areas with low water flow so house fire response by LVFDP brings out a minimum three engines to supply the needed water (and the department just bought a new water tender). Zlendick said the whole water system is taxed when they fight a fire, and that could lead to a damaged water system. He said insurance companies are looking at a community's fire fighting capabilities including water flow when determining to insure a home or business, or not.

By a vote of 3-2, it was approved to start noticing ratepayers there would be a rate increase of up to five percent for sewer rates and six percent for water rates. Director Jim Jones wanted the 8.5 percent increase to address what he says are long overdue repairs. Director Chris Cefalu wanted the 5 percent scenario to give ratepayers less of a burden. Directors Nick Exline, Randy Vogelgesang, and Kelly Sheehan agreed with Chris but said they could live with the slightly higher rate to address concerns a bit quicker.

The District will look at the possibility of billing customers monthly next year to ease the checkbook pain when paying their water bills, but in the meantime, they will remind customers they can always break their quarterly bill into monthly payments.

Thiel and his staff must now start the Proposition 218 requirements when rates are proposed to change. A notice will go out to customers, advising them that rates may go up starting July 1, 2019. During their May 16 meeting, the STPUD Board will hold a public hearing and decide on what the actual increases will be. The notice will state a 6 percent water rate increase and a 5 percent sewer rate increase but the Board can vote to approve less (but not more).

Prior to the Board vote, resident Harold Singer suggested staff Prop. 218 notice the public with an 8.5 percent rate increase, something that would give the Board leeway each year on what the budget needed to get projects completed.

If the rate increase is approved it will still be voted on each year by the Board for the next five years. They may choose at any of those annual reviews to raise rates at a lower percentage.