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Protests fall short to halt city water rate hikes

The proposed series of water rate increases in Ceres failed to garner enough protests on Monday, setting the stage for their enactment effective Jan. 1.

A handful of residents turned out for the City Council Prop. 218 protest hearing to voice their displeasure at the increases but most were resigned to the fact that the hikes are needed to enable Ceres to supply a dependable water source in the future. Under Prop. 218, at least 50 percent plus one written protests are required to halt fee increases. City Clerk Diane Nayares-Perez announced that the city received only 172 written protests, or 0.15 percent. Because 11,640 parcels are affected, 5,821 protests would have been required to stop the city from enacting increases.

The increases start out next year with a 40 percent increase, followed by 37 percent the following year. Smaller increases follow for the three years following.

"Further improvements are needed to maintain water supplies and quality," explained Public Works Director Jeremy Damas. "We need to provide water that's sustainable and reliable for the future years to come. Historical reliance on groundwater only is not sustainable. Wells have been shut down due to poor quality and many wells require treatment. Pumping costs are increasing as water tables plummet."

To steer away from 100 percent reliable on groundwater, the city along with Turlock are planning to build a regional surface water plant at Fox Grove near Hughson. Tuolumne River water will be treated and piped to homes in Ceres and Turlock and comingled with groundwater by 2022 or 2023.

Much of the rate increases are designed to enable the city to pay for its expected $100 million share of the plant's construction and operation.

The rate increases also will pay for the higher costs of operations and maintenance as well as capital projects to upgrade the existing water system. Capital costs continue to climb, including $10 million for wellhead treatment over the next five years.

The proposed rate increases cover the period from Jan. 1, 2018 to 2022. If enacted, the increases would result in the average Ceres single-family household water bill climbing from $40.13 per month now to $56.18 on Jan. 1, 2018; to $76.97 on Jan. 1, 2019; to $80.82 on Jan. 1, 2020; to $84.86 on Jan. 1, 2021; and $88.25 on Jan. 1, 2022.

Ceres Mayor Chris Vierra acknowledged that the increases will be painful for many but said they are unavoidable.

"I hear all of your comments and I completely feel for you for how difficult this is," said Mayor Vierra, "but our water system is not sustainable as it currently is. At least we have an option now to take control to secure that we will have a long-term sustainable water system. We're fortunate that our partners from TID are selling us raw water that we can augment our groundwater."

Vierra said the increases are the maximum the city will be charging and that any grants obtained will reduce what is ultimately charged. State Assemblyman Heath Flora is carrying legislation that could result in $30 million being allocated for the Ceres-Turlock project if California voters approve a new water bond measure in June.

"It will help set those rates lower," commented City Manager Toby Wells.

Rate increases are also in order to help the city deal with challenges of filtering out TCP, or trichloropropane, a known carcinogen. TCP affects over half of Ceres' wells. In Turlock, contamination of wells is a greater problem. Rate payers there are also looking at similar increases, the mayor noted.

"Reliance on groundwater is really unsustainable," said consultant John W. Farnkopf, HF&H's senior vice president.

"The water rate increase is not going to be good for people," John W. Butler told the council. "I know it's something we've got to put up with. I think the thing that I'm most concerned about, and maybe other people are, is that this rate increase will stay after everything's been completed. Don't do that. Whenever you've got the plant built lower the water rates. Don't keep the (rates) in place so you can make more money, okay?"

Vierra told Butler that the city cannot, by law, make money on the water system and can only charge based on the cost of providing services.

Resident John Warren of Ceres acknowledged that the city needs to build the surface water project. He also asked the city look into offering a balance payment plan like some electric companies do.

Ceres has approximately 12,000 households connected to the city water system. Most single-family residences are serviced through a one-inch diameter connection or smaller.

Currently water rates are based on a basic service charge of $20.23 per month plus a rate of $2 per 1,000 gallons of water used if less than 75,000 gallons are used each month. The current volumetric charge goes to $2.90 per thousand gallons if more than 75,000 gallons is used. Less than two percent of all accounts fall into the second tier of pricing. The average single-family household uses about 10,000 gallons each month.

While the increases in water rates are going up 40 percent in the first year alone, the council appeared surprised when they learned that the overall city utility billing - including water, sewer and garbage - will only increase by 14 percent.

Farnkopf told the council on Sept. 11 that the city has taken great effort in recent years to address water system deficiencies such as low water pressure in some areas and addressing water quality problems. The last series of increases helped the city pay for installation of water meters on all homes as mandated by the state.

HF&H Consultants has also recommended the city enact a large increase in water connection fees paid by home builders. Connection fees are not subject to Prop. 218. The city is proposing to raise the water hook-up fee for new homes from $6,697 to $7,657 on Jan. 1 and increase annually to $8,729 by Jan. 1, 2022. City Manager Toby Wells said the city will reach out to the Building Industry Association to communicate the city's plans.