By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
Ceres' water future carries hefty pricetag
Placeholder Image
Over $200 million in capital projects will be needed to ensure that the city of Ceres can continue to provide enough good, clean water for existing and future customers.

Members of the Ceres City Council got a first glimpse of the results of a water master plan during a Monday evening Study Session. The master plan has identified deficiencies in the water system and ways to cover the cost of future improvements.

The city of Ceres finds itself short in capital improvement project (CIP) funds because water rates had stayed stagnant for 12 years prior to 2008 rate increases designed to make the water system pay for itself. The city's recent move to a metered rate structure was part of a state mandate for conservation, and not intended to raise revenues.

Needed improvements include additional wells and pipelines, expensive wellhead treatment to remove contaminants, constructing a 2-million-gallon water tank at Ceres River Bluff Regional Park and two new reservoirs on the west side where new development is to take place.

The city needs to generate and set aside $2 million annually over the next 25 years to ensure service remains for existing customers as well as expand the system when Ceres grows.

John Farnkopf of HF&H Consultants recommends that the council implement a series of rate increases and adjustments. Rates, under his plan, would increase less than 10 percent per year, adding an average of $3.80 per year until the 2017-18 fiscal year. Average household bills in Ceres are now $30.59 per month but could hit $50.73 by the 2017-18 fiscal year if the council adopts the plan.

Farnkopf said his plan keeps the base rate, or service rates, stable while increasing charges on volumetric charges which are based on the amount of water used per month.

Currently residents pay 72 cents per 1,000 gallons of water used each month in addition to the base charge. Farnkopf recommends that rate be increased to $2 per thousand gallons by 2017-18.

"It looks like a fairly steep increase," said Farnkopf, "but this just gives you a margin of safety."

Since going to metered rates, a Ceres household pays a base fee and an additional charge based on volume. The city should adopt, he said, an additional tier that would pressure high volume users of over 50,000 gallons per month to reduce their consumption. A typical Ceres household consumes close to 16,000 gallons per month. The top three percent of Ceres households, however, use 50,000 gallons per month, with some hitting over 200,000 gallons.

He suggests the higher tier rate be upped to $1.45 per thousand gallons starting next year and jump it to $2.90 per thousand by 2017-18.

The council expressed concern over steep service rate increases recommended for commercial lines in excess of four inches. Few users use the larger lines; a total of 42 accounts have four-inch service while only three have six-inch lines. Some schools in Ceres and the county Public Safety Center use the four- and 6-inch lines.

Councilman Bret Durossette expressed concern that the recommended increases would be burdensome for large line businesses and industrial users and put Ceres at a disadvantage when competing with neighboring cities - like Turlock - which has lower rates. He singled out the proposed service charge for commercial users with six-inch lines jumping from $313.78 per month to $742.88.

"That's a huge jump of $460," noted Durossette.

Councilman Eric Ingwerson agreed that water costs could play a factor in whether a business or industry chooses to locate in Ceres. The council suggested the rate adjustment plan be softened before the proposal goes into the public hearing process.

An estimated 10,800 accounts use lines sized at under an inch in diameter. Only 204 connections use inch diameter lines. A total of 340 accounts use the two-inch meters.

City Engineer Toby Wells said the existing metered rates are not tied to capacity and are "based on a number we cannot validate. The proposed rates take it to a science of pricing ... it's really a true up to get the rates to match up."

The proposal does not take into consideration what must be set aside for the city to participate in the $151 million regional surface water project, said Gerry Nakano of West Yost Associates, which was commissioned by the city to produce the water study. When the plant goes on line in 11 years, he said, Ceres and other cities plan to blend both treated river water with well water for home use. Ceres will be able to take six million gallons per day but currently uses 12 millions per day. Nakano said Ceres households may be impacted an additional $8 to $16 per month once the surface water project goes on line.

Farnkopf also suggests the city increasing water connection fees for the smaller lines from the current $4,985 to $6,000.

He said the objectives are to ramp up collecting more dollars for capital projects from the current $900,000 annually to $2.3 million annually by 2017-18 fiscal year.

Farnkopf said another goal is to increase water fund reserves to a balance equal to two months for operations and maintenance costs plus two years of capital improvements, or $3.6 million.

Ceres resident Dave Pratt didn't like what he heard Monday. "I could see me pulling out my yards to escape this thing," said Pratt."I can imagine what my water bills are going to look like in a few years."

Wells said no city will be able to escape raising rates to pay for state water quality standards set by the state.

Excess funds could be used to stabilize future rates, said Wells, if future capital projects come in at a lower price.