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In This Issue...
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San Lorenzo Valley Water Asking for Rate Hike
By R.T. Sideman
Less than six months after acquiring the Felton water system from California American Water at the request of residents upset by high rates and no local ownership, the San Lorenzo Valley Water District has proposed increasing its rates more than 30 percent over the next three years.
If the hike is approved, local customers will still pay some of the lowest water rates in Santa Cruz County â€" except for Felton rate payers, who must also pay the cost, some $11 million, of acquiring their local water system from CalAm last year.
The San Lorenzo Valley rates would increase by 15 percent on Mar. 15, then again by 10 percent for 2010 and another 5 percent for 2011. By the end of the increases, the basic use fee for households would be $47.45, about the same amount currently paid by Scotts Valley homeowners.
Prior to selling its Felton system, CalAm had petitioned the Public Utilities Commission (PUC) for rate increases. By May 2008, CalAm had reduced its request to 54.5 percent.
“There’s obviously a big difference between what CalAm proposed and what we are proposing,” said water district manager Jim Mueller.
However, that doesn’t allow for the $11 million bond repayment Felton property owners must pay in addition to the SLV service rates.
A public hearing on the SLV Water increase is set for Mar 5. Because SLV Water is publically owned, the district does not have to gain PUC approval to raise rates.
Residents who wish to oppose the rates must submit written protests by that meeting. If a majority of property owners do so, by law the rates may not be changed.
Rate Increases Not Unusually High, Mueller Says[/b}
Mueller said the proposed hikes are not unusually high. The hikes account for basic inflation and anticipated infrastructure projects, he said.
The proposed hikes represent a maximum limit. The water district Board of Directions will have the option to raise rates to a lesser level, Mueller said.
“It’s really at the board’s discretion,” he said.
Jim Graham of Felton Friends of Locally Owned Water (FLOW), the group that fought off control by CalAm, said that everyone in the group understood water rates would still need to rise under local ownership.
“We knew there would be a rate hike, but the difference now is that the district can explain what the causes of the hikes are,” Graham said. “And rather than shifting all the local profits to the company’s other water districts, the money is reinvested back into our water system. Plus, I like that we don’t have to deal with layers of management like with CalAm.”
Bi-monthly water bills include two charges, one for basic service based on the size of the pipes and another based on the amount of water used. The district proposes increasing both categories.
Usage rates go up the more water is used, and each water district breaks up those tiers differently. However, San Lorenzo Valley’s charge for 40 units in 2011 is more than $5 a unit less than the Santa Cruz City Water Department currently charges its out-of-city customers and about half of Scotts Valley’s current comparable rate.
The district mailed letters to all of its customers explaining the rate hike and the process for approving it.
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