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City prepares for water rate increases

POSTED December 13, 2013 6:33 p.m.

As California continues to face diminishing groundwater, the City of Turlock will soon have to take measures of its own to keep the precious resource flowing.

In the last City Council meeting of the year on Tuesday, Turlock Municipal Services Director Michael Cooke shared with the council members that the City will be looking to water rate increases over the next five years – a turn that the City has been expecting for some time as groundwater continues to become scarcer.

“It’s not cheap,” said Cooke on Tuesday while discussing the City’s water conditions. “All the cheap water is gone, unfortunately.”

Although the purpose of the discussion on Tuesday was to not approve any water rate increases as of yet, the Council was tasked with establishing a hearing date for the item on March 25, 2014 prior to their consideration of a series of water rate increases. The rate increases would also have to make it through a protest election before the Council could make such a decision.

According to Cooke, the City is looking to approve six rate increases over the span of five fiscal years for Turlock residents.

“We do need to take action one way or another,” said Councilman Steven Nascimento. “Water has been very cheap, but like Mike said, all the cheap water is gone. It certainly won’t be popular, but I think that the residents are expecting it. We have no other options if we want keep water running and flowing.”

While rate increases for a groundwater only system is not ideal, the rate increases are expected to be fairly modest in comparison to the rates necessary for a surface water supply. City staff is recommending that the Council utilize the groundwater only system as the preferred alternative at this time, given that an agreement has yet to be reached with the Turlock Irrigation District for the Regional Surface Water Supply Project.

“We are going to continue pursuing the Regional Surface Water Supply Project,” said Cooke. “It is the best option for our long term future for sustainable water supply and further economic development.”

The City also says that staff is continuing to pursue participation with the Stanislaus Regional Water Authority for the RSWSP and are continually negotiating with TID to supply water for the project.

However, should the RSWSP proceed, Cooke says that the rates will then have to be increased significantly, following a second round of notifications and protest elections – perhaps only 18 to 24 months from now, he shared.

Due to the current structural deficit in the Water Enterprise Fund, City staff says that it is imperative for the Council to not delay rate increases any longer.

“RSWSP rate increases may be needed in 18 to 24 months,” said Cooke. “But we’re not asking for all of this at this time.”

The Council is expected to adopt a rate implementation schedule no later than July 1, 2014 for the first rate increase, January 2015 for the second rate increase, and then every Jan. 1 thereafter. The Council could alternatively opt to elect a larger initial rate increase in July 2014 and allow delay for the subsequent rate increase until January 2016.

Over the past four months, staff have completed an analysis on the detailed cost comparisons of either keeping a groundwater only system versus a groundwater and surface water system, the long-term costs of upgrading the City’s groundwater supply system should the City not proceed with the surface water project, revisions to the capital cost estimates for the surface water supply project – particularly the various facilities that would be needed to interconnect the surface water with the existing groundwater system – and the continued negotiations on the surface water project between TID and the Stanislaus Regional Water Authority.

According to City staff, although the negotiations with TID have been “productive” it has become apparent that an agreement will not be reached in the near future. Having found this, staff has recommended that the rate increases necessary for the construction of the RSWSP be delayed until the project has reached a more advanced stage.

Although the significant increases for the construction of the project are not needed at this time, the City says that a series of modest rate increases are still needed to improve the Water Enterprise Fund’s financial deficit, while also making improvements to the City’s existing groundwater system.

“We do need to make some capital improvements if we are going to continue using the groundwater only system for a couple more years,” said Cooke. “The groundwater situation in our area is a challenge.”

Cooke says that even with the groundwater only system, customer bills will still require increases to fund capital improvements, such as wellhead treatment.

While rate increases are certainly in the near future for Turlock residents, Cooke says that the incremental cost of the surface water project compared to a groundwater only system are not as significant as initially projected.

For instance, by 2023, it is estimated that the average monthly single family bill will be approximately $12.45 higher using a surface water and groundwater system, compared to a groundwater only system.

Diminishing water resources continue to plague the entire state, however, as a recent study by UC Irvine using NASA data found that the aquifer in the San Joaquin Valley is being over-drafted by 800 billion gallons per year. Due to increased agricultural pumping in the eastern part of the region, the aquifer has declined over 100 feet, having a significant impact on groundwater flows in the Central Valley region.

Although the City Council will not meet for the remainder of 2013, it is expected that the issue of water rate increases for Turlock residents will be continually discussed when the Council reconvenes in January.

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