By BOB NORBERG
THE PRESS DEMOCRAT
Spreading water and sewer rate increases over seven years instead of four will lessen the immediate pain for Sebastopol residents, but in the long run it will end up costing more, according to a city analysis.
“It is like a mortgage,” said City Manager Jack Griffin. “You pay more on a 30-year mortgage than a 15-year mortgage even if the interest is the same because the balance is not coming down as fast. The longer you theoretically are in debt, the more the debt costs.”
The City Council is considering rate increases to cover a $370,000 deficit in the water fund next year and to pay for maintenance and replacements in the aging water and sewer systems.
The council at its March 6 meeting deferred action on a staff proposal to double the rates over the next four years, asking instead for alternatives that would have smaller increases.
The city’s water and sewer funds are designed to be self-supporting, relying on fees from the users and not from the city’s general fund. The last rate increase was in 2008.
Griffin said the city needs to cover the deficit, the cost of water and sewer service and also set aside $500,000 a year for maintenance and improvements for each of the systems.
The city this year deferred $1.1 million in maintenance on the water system and $3.9 million on the sewer system.
The city as part of a legal settlement from a sewage spill two years ago must inspect the entire sewage system, using cameras inserted into the lines, at a cost of $400,000.
The staff has proposed a water rate increase of 25 percent beginning in July, 22 percent in 2013-14, 18 percent in 2014-2015 and 15 percent in 2015-2016.
The proposed sewer rate increase is 12 percent for each of the next four years.
After that, the rates could be reduced, according to the staff analysis.
A typical combined water and sewage bill under the present rate structure is $437.22 a year, which would be increased under the staff proposal to $604.52 for next year and to $893.88 in 2015-2016.
Under three alternative proposals that will be presented Tuesday, water rates could be increased 16 percent or 17 percent over the next five years or 13 percent over six years, after which there would be small decreases.
The sewage rates under alternative proposals could be increased by 7.5 percent, 8 percent or 10 percent over the next five to seven years, followed by small decreases.
In each alternative, the lower rate increases accomplish what the larger increases proposed by city staff will do. But after four years the alternative rates remain higher than the rates proposed by the staff.
The council meeting is at 6 p.m. Tuesday at the Youth Annex.
You can reach Staff Writer Bob Norberg at 521-5206 or email@example.com.