The Los Banos City Council on Wednesday reviewed planned utility rate increases, deemed a necessity by staff.
City Council adopted a water, sewer and garbage rate increase in August, which raised fees by $6.12, or 10.36 percent. The next scheduled increase is 12 percent, or $7.86, on July 1. The total minimum rate after that increase will go from $65.21 to $73.06.
Brent Kuhn, consultant and acting chief financial officer, said the increases are necessary to build savings for projects and to improve the wastewater fund after an emergency repair last year.
"One of the problems with the wastewater fund was it was low in terms of any capital reserve, or cash reserve, for these types of emergency repairs," Kuhn said. "So any more of these things could compound the problem within that wastewater fund."
The city dipped into its contingency fund for a $125,000 emergency fix at the wastewater treatment plant in November, when a 360-linear-foot concrete pipeline installed in 1961 ruptured sewage.
City Manager Steve Rath said the line's implosion could have been an environmental hazard, and is an example of the importance of building up a fund.
"The wastewater inflow line was an indicator of how fragile the system is," Rath said.
Public Works Director Mark Fachin said public works has budgeted with the current rate model in mind. "That rate model holds," Fachin said. "I mean it holds to what was approved, that's why it was approved by council at that time."
Councilman Joe Sousa said it would be a mistake to make any changes to the planned rate hikes, which would restart public hearings. Rate increases were voted down at two council meetings last year, before being approved by a 6-1 vote.
"We went through this contortion, for lack of a better word, to improve this rate model and these increases," Sousa said.
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