A year after the City Council delayed raising sewer bills because of the bleak economy, a proposed rate increase is going before the council again.
This time, city staff say putting off the increase would be a bad idea.
Delaying an increase now will cost the city more down the road, Rich Ulm, deputy director of utility planning and projects, said at Monday night's City Council finance committee meeting.
Committee members Dave Geer, Brad Hawn and Garrad Marsh voted to send the proposed rate increase to the full City Council.
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If approved, a monthly bill for a typical family would go up 72 cents to $24.83 in July. A year later, monthly bills would increase $1.99. By 2014, a family's monthly bill would be $34.41.
Commercial and industrial users would see higher bills, too.
The city says it needs to raise customers' bills to help pay for $135 million in upgrades at its Jennings Road treatment plant. The upgrades are necessary to meet stricter state regulations about how clean waste water must be before it's dumped into the San Joaquin River.
Modesto was up against a deadline to meet those standards by 2013 or face fines. The city recently won an extension until 2016. That gives Modesto some breathing room, but it doesn't rule out the need for a rate increase this year, public works officials say.
The City Council in 2007 approved a five-year plan that called for yearly rate increases. In 2008, the council voted to reduce the pending rate increase. In 2009, the council skipped the increase.
Committee members Monday chose the more gradual of two proposed rate increases, opting for the plan that raises bills 3 percent this year instead of 6 percent.
"With the economy right now, if we can take the smallest increase we can, the better off we are," Marsh said.
Eric Reimber of the Stanislaus Taxpayers Association questioned the need for the rate increase, noting that the city's financial statements show a waste-water fund with $51 million in cash.
City staff members said the number in the financial statement is misleading because at least $22 million is restricted to specific uses and can't be used for treatment plant upgrades.
City Manager Greg Nyhoff said the city will add footnotes and explanations to future financial statements to avoid confusion.