City leaders have released a preliminary draft of two scenarios outlining increases to residents’ water and sewer rates over the next five years.
City Manager Jose Ramirez said the draft is a “work in progress” but gives people an idea of what the new rates could look like under each scenario.
Scenario A would nearly triple the water rate of $9.90 to $29.09 by April 2014 for homes using less than 25,000 gallons of water. The rate would increase to $36.15 in 2015, then $42.89 in 2016, $45.91 in 2017 and $49.07 in 2018.
Scenario B would scale back the increases, setting the 2014 rate at $27.34 for those users. As in the first scenario, the rates would increase gradually over the next five years, reaching $33.44 in 2015, $36.18 in 2016, $37.09 in 2017 and $42.11 in 2018.
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Ramirez said scenario A is more costly to ratepayers because it includes everything from the city’s capital improvement program list, including building new wells, purchasing operating equipment and replacing old gear.
Scenario B includes the same capital improvements with the exception of upgrades to two wells. Both plans provide $100,000 a year for the city’s emergency contingency fund, which is used to replace equipment that breaks.
There’s no difference in the sewer rates between the two scenarios. The current rate of $30 would climb to $44.23 in 2014 under both plans but wouldn’t increase again over the next four years.
Longtime Livingston resident Katherine Schell-Rodriguez has followed the city’s water management over the last five years and said the proposed rates don’t surprise her.
“I have known for some time that our water-delivery system has had issues, and it’s only a matter of time before we face a crisis,” Schell-Rodriguez said. “Given the arsenic, manganese and TCP problems we have and will need to address, I’m not at surprised at the size of those numbers.”
Schell-Rodriguez said the proposed rates aren’t that different from the 2009 rate hikes that fueled an effort to recall the mayor and two council members.
After the recall, rates were rolled back to 1995 amounts. Livingston hasn’t raised rates since 1995, and officials say the city’s water service cannot pay for itself on the old rates. Both the water and wastewater services have run up a $1 million deficit over the past 14 years.
“When you try to catch up for years of not having raised rates in the past, this is what you get,” Schell-Rodriguez said. “If we had raised rates incrementally all along, we wouldn’t be facing the issues we are now facing.”
Livingston Mayor Pro Tem Gurpal Samra said rate increases weren’t necessary in the past but are critical now to reduce the water fund’s deficit and pay for equipment upgrades to eliminate water contaminants.
“Everyone knows we have water-quality issues, and we have to do something about it. There’s no way you can cover the filters and other upgrades under the current rates,” Samra said. “If you look around, you’ll see that Livingston has the cheapest rate in the Valley – definitely in Merced County.”
The city manager said the next steps include bringing the two proposed scenarios to the next utility meeting, tentatively scheduled for the second week of January. There might be a third or fourth rate-increase scenario presented in the near future, Ramirez said.
The public can comment on the rate plans in public hearings before they go to the City Council for a vote, he added.
Amid the proposed rate hikes, the city manager confirmed the termination of Humberto Molina, the city’s director of public works. He declined to elaborate why Molina was let go, but said the move won’t affect Livingston’s future water management.
“We certainly valued his expertise, but right now we are able to manage between myself and the city engineer,” Ramirez said.
A recruiting effort is underway to replace Molina, who worked for the city a little more than a year.