Just six months after the City of Turlock made a state-mandated change to metered water billing, the billing structure may be altered once again.
Talk of a change in structure, which would likely result in higher rates for some and lower rates for others, comes as Turlock City Council members learned Tuesday the city expects to run a $1.2 million deficit in its water account this year.
The projected $1.2 million deficit is only about $300,000 more than an initially expected $960,000 deficit, but is more than expected.
In the short term, Turlock Regulatory Affairs Manager Michael Cooke said the city would bridge the gap by reducing expenses, cutting back on the capital project budget, and reducing contributions to a reserve account. Some maintenance will be deferred, and reserves will be spent down.
But that solution isn't sustainable for the long-haul, Cooke said.
“It's likely that, unless things change dramatically, we'll be making recommendations at the end of the year that we change the rate structure,” Cooke said.
While a new rate structure is still being devised, Cooke said it's likely Turlock will adopt a model used by many other cities, where each customer pays a base customer charge and is then charged for each gallon used. The system would be similar to the current system, but would do away with the base water allotment.
Under the current metered water billing, which went into effect on Jan. 1, consumers pay a $22.05 monthly fee for a 20,607 gallon allotment of water. Usage beyond that allotment is charged at $1.07 per 1,000 gallons. Previously, Turlockers paid a $31.50 flat monthly rate.
The new, shifting price structure sees the average user pay less in winter months, when lawns don't need to be watered, usually near the $22.05 minimum. But in summer months, the average user pays about $38 per month due to increased usage.
Due to the change in structure, users are paying, on average, about $6.20 less per month, Cooke said, a 19 percent reduction.
The revenue problem has been exacerbated by Turlockers' good behavior. While Turlock had budgeted for a 15 percent decline in water usage year-over-year as a result of the shift to metered billing, the city has seen Turlockers go greener than expected.
“Turlock, being overachievers that we are, we're down about 20 percent,” Cooke said.
Combined with a lack of customer growth due to the stagnant homebuilding market and a wet spring and early summer which reduced water usage, Turlock's water budget faces an impact that's “not so great” in Cooke's words.
Though usage is down, Turlock still faces significant unavoidable fixed costs – about 79 percent of the water fund budget.
“Before we ever pump the water, we have those expenses,” Cooke said.
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