Water Authority Angles For Rate Increase As It Debates Its Savings

The authority that controls how much we pay for water service is going to ask ratepayers to approve an increase in the cost of water — as soon as it figures out how much money it wants to have in the bank.

The Suisun-Solano Water Authority believes it needs to raise water rates to pay for ongoing operational expenses and maintain a reserve to deal with replacing an aging infrastructure, such as its Cement Hill plant.

Authority staff also believes that to comply with recent laws, the rates need to be more equitable between residential customers like the average homeowner and non-residential customers like the Fairfield-Suisun Unified School District and area businesses. Currently non-residential customers pay less per unit of water than residential customers.

The question Tuesday night was, as Suisun City Mayor and authority board vice chairman Pete Sanchez put it Tuesday: How can the authority ask its ratepayers to approve what could be — in one scenario — a 13 percent increase in water rates over the next few years when the authority is sitting on a 50 percent operating reserve fund?

“It would be really difficult to sell these increases to the public when we’re sitting on this large amount of money,” he said.

Although the authority has no firm number on the costs it will need to manage when some of its pipes, meters and other equipment that may need replacing, a multi-year financial plan advises the board to think of those potential costs when approving how much money the authority keeps in reserve.

If high-cost replacements come up and the authority doesn’t have enough savings to pay for them in cash, it will have to borrow the money and cost ratepayers more money in the long term by paying for interest on loans.

“I think it’s very important we stay at 50 percent (reserve),” Board member John Kluge argued, saying he wanted to avoid costly debt payments. “We’re selling our future here.”

Board member and Suisun City Councilman Mike Hudson agreed with Sanchez.

“I think the real concern is the high level of unemployment,” he said. “At this point we’ve got a lot of money in the bank.”

Board members and Suisun City Council members Jane Day and Mike Segala also had concerns about the way ratepayers would view so big a reserve.

Ultimately, the board settled a long debate about what staff was told the reserve should be by voting to have staff construct a rate system based on a 25 percent reserve, and come back at a May meeting to discuss the matter further.