By a 4 to 1 vote the Turlock City Council approved the commissioning of a water rate study that could clear the path for rate increases for Turlock residents in coming years.
The City Council gave the go ahead for the Municipal Services Department to start accepting proposals from professional consulting services to assist in preparing the water rate study. Once the proposals have been gathered and studied, the Municipal Services Department will come back to the City Council with a recommendation on which firm to hire. The City Council could at that time opt to hire a firm, abandon the study, or come up with another option.
The Municipal Services Department requested the new water rate survey in an effort to help close a projected shortfall of $780,000 for the 2012-13 fiscal year. The shortfall comes from the state mandated switch to meter-based billing, which has caused a dramatic decrease in revenues.
The use of meter-based billing is supposed to reduce water consumption because consumers are more aware of their water usage. While water use is down by 5 to 6 percent in the city, revenue has fallen by a disproportionate rate of 12 to 15 percent, according to Municipal Services data.
“It’s an interesting problem we have,” Councilman Bill DeHart said. “We ask people to be responsible for their water usage and they have and now we have to raise their rates.”
Water customers are given a minimum water allotment of approximately 20,600 gallons for the minimum charge. Currently, Turlock residents pay $25.54 for 22,000 gallons per month, plus additional charges for more usage. Only Newman and Oakdale pay less for water.
Residents do not pay any fees for the delivery of water, which City Manager Roy Wasden called “an unusual structure.”
“You pay to have your home set up with electricity whether you use it or not, but that’s not the case with water,” Wasden said. “The gallon usage price doesn’t cover the cost of delivering the water."
The lone vote against accepting the proposals was cast by Councilwoman Amy Bublak, who argued that city staff was more than capable of completing a water rate study on their own.
“It seems like an expenditure that is unnecessary,” Bublak said. “We can do better ourselves.”
In her dissent, Bublak suggested the minimum water allotment could be lowered as a way of generating revenue instead of rate increases. It was a suggestion that Councilman Forrest White said had merit but would need to be studied to verify its viability.
“That could be an alternative looked at in the water rate study, but you need to be able to look at all the data,” White said.
The last water rate increases for Turlock come in 2008. A water rate survey in 2004 led to an implementation of five rate increases between 2004 and 2008.
That water rate study was good for five years and in 2009 the city approved another study. The 2009 study predicted that the meter-based billing would drop revenues to an inadequate level for covering long-term expenses and future water use projects and recommended rate increases.
The sitting City Council at that time opted to not enact a rate increase, choosing instead to wait and see what the true revenue impact would be from meter-based billing. The two years of data have shown revenues falling each year.
“There is a need for some sort of restructuring of our rate,” Municipal Services Director Dan Madden said.
The cost of the water rate study is expected to be between $30,000 to $50,000 and take three to four months to complete.
