What’s at stake?
This would mark the first time city water rates have increased in almost a decade. For sewer rates, it’s been 16 years.
On Thursday, the Fresno City Council could decide whether to take the next step toward raising water rates for the first time in almost a decade and sewer rates for the first time in 16 years.
A staff report estimates the rate change would tack on an additional $1.77 each month to a typical resident’s water bill in the first year of the five-year rate adjustment plan, while they would see a $0.95 decrease to their sewer bill — with the decrease stemming from differently structured rates for residential versus industrial and commercial customers.
The council’s agenda item comes just about a month after staff presented a financial plan for the first phase of the controversial Southeast Development Area, or SEDA, project that hinged partly on city utility bills.
One of the scenarios proposed the city make use of utility department reserve funds — or, if those run out, surcharges on residents’ utility bills — to front the money for a roughly $86 million bond to build the development’s first sewer pipe.
But are that financial plan and these proposed rate hikes related? The mayor says “no.” One councilmember says “yes.”
In an interview Tuesday with Fresnoland, Mayor Jerry Dyer said these rate increases are a long time coming and, without them, aging pipes could turn into safety hazards.
“We’ve been studying this for the last three years … actually four years, when it was first brought to me,” he said. “I’d held off on the water rates and the wastewater rates until now, where I felt it was an absolute must.”
Dyer said some of the reasons these rate hikes are coming now include rising costs of everything from energy and chemicals for treatment to staffing and meeting regulatory standards.
But Councilmember Miguel Arias said he believes the “higher-than-necessary” rate increases were drawn up so the city will have more money to bond against in the future for the sake of SEDA.
“They have money set aside for yet-to-be-defined capital projects,” Arias said. “That’s code for SEDA.”
City documents list a range of projects that would be funded by the increased and adjusted rates, like the renewal of water mains and constructing wells. The rate increases will also help fund “additional contributions to the operating reserve to fund costs for emergencies or unforeseen expenses.”
Arias said there’s “no financial reason” for this given infusions of cash for water and sewer upgrades in recent years from sources like the city’s historic $233 million settlement with Shell and Dow over contamination of drinking water and the state’s nearly $300 million investment in infrastructure improvements for downtown and Chinatown.
Dyer, who said the proposed rate hikes have nothing to do with building SEDA or any future development, disputed that the city can afford needed upgrades without increasing rates.
The settlement money goes toward only specific city wells, he said, while the state funding only benefits a handful of neighborhoods.
“Those rate increases may have been more, had we not received those dollars,” Dyer said of the state infrastructure funding. “But those dollars certainly were not enough to prevent an overall rate increase when you’re talking about an entire city and our older neighborhoods throughout Fresno.”
Dyer added that the revenue from the rate hikes would benefit older neighborhoods.
“These dollars are for the purpose of replacing infrastructure in neighborhoods, older neighborhoods that exist currently today and have existed for hundreds of years,” he said. “This isn’t about providing any funding for the future growth of our city to include SEDA.”
The new sewer rate structures make adjustments between residential, commercial and industrial consumers. Dyer said the goal is to ensure residents aren’t “subsidizing commercial or industrial” customers.
The council will decide on Thursday whether or not to move forward with pursuing the new rate structure, which would follow with a public hearing on Dec. 3. The item is on the council’s consent agenda, which allows councilmembers to pass it without discussion.
Fresnoland reached out to Councilmembers Annalisa Perea, Tyler Maxwell and Nick Richardson for comment on Tuesday.
Arias said it’s “bananas” that the item is on consent and wants to table the item to allow more meetings with residents about how the city arrived at the new rate structure before moving forward.
He also called a news conference to discuss the rate hikes for Wednesday morning at Fresno City Hall.
“There’s no urgency on this item to do it now. We literally are completely backed up with building the water and sewer lines in downtown Fresno and Chinatown,” Arias said. “We’re at full capacity in terms of construction for the utilities department. There’s nothing in that capital project (list) that is urgent in nature, that it couldn’t wait to have a full public discourse on the subject matter.”
