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Council will again consider rate increases in sewer fees

By BARBARA DIAMOND

The City Council will pick up today where it left off discussing sewer financing options at the April 21 meeting.

Three options were proposed by staff at last week’s meeting on financing the Wastewater System Capital Improvement Program, which included rate increases of five and 10 percent per month for residential and commercial properties. A glitch in the estimated monthly increases for commercial properties prompted the council to continue a decision to allow clarifying the amounts, which were as high as $90 a month if a 10 percent was approved, half that for a five percent increase, and zero for no increase.

“If it’s $90 a month, I couldn’t support it,” said Mayor Pro Tem Steve Dicterow.

The new figures to be reviewed tonight differentiate the increases by use: low, medium, heavy, and mixed-use. 

Mixed-use properties, defined as combined low, medium, and heavy-use, were hardest hit, with a proposed 10 percent increase of $168 a month. The low-use increase would amount to $12 a month; medium-use, $70 a month; and heavy-use, $62 a month. 

Charges for commercial properties are based on the volume and strength of the discharge (the level of pollutant concentrations), which must be removed from the wastewater at the treatment plant, resulting in a widely varied user charge, according to the staff report by David Shissler, director of water quality.

A council vote in February authorized the initiation of a protest vote on a 10 percent increase for all properties that would serve as a first step in addressing the financial impacts of the Thanksgiving Day sewer spill. The 10 percent increase would also fund planning for vitally necessary improvements to the North Coast Interceptor that carries raw sewage from City Hall to the Coastal Treatment Plant at Aliso Beach. 

However, Governor Gavin’s Newsom’s stay-at-home order severely impacts the city’s revenue and the income of folks who live or own businesses in Laguna Beach who would be paying the increase. 

The 10 percent increase would cost a single-family residence $66.74 a month, a $6.07 monthly increase or roughly $72 for the fiscal year. A five percent increase would cost half that. No increase would leave the rate for a single family-residence at $60.67 a month. No changes were made from the projections at the April 21 meeting. 

Three financing scenarios for residential increases as outlined at the April 21 meeting: 

Zero increase option pros* and cons**

*Provides time for the negotiations with the regional board to reach a conclusion on the assessment for the spill.

*Provides time for a more detailed cost analysis for the Interceptor improvement projects, based on a study underway.

*Defers improvements to the Anita Street Lift Station reconstruction and reduces the scope of improvements to the Victoria I Lift Station.

**Staff reports the option will trigger higher increases in the future to fund necessary capital improvements.

Five percent increase pros* and cons**

*Escalation of future sewer-user charges could be reduced.

*Maintains full funding for Victoria I.

**Triggers higher increases in the future to fund capital improvements other than Victoria I.

Ten percent increases pros* and cons**

*Preserves the existing 10-year Wastewater System Capital Improvement Program.

*No projects deferred.

*Will somewhat offset the need for higher sewer rate increases in the future due to unexpected costs or emergency repairs, especially important according to staff in consideration of multi-million dollar improvements to the Interceptor to limit future spills.

*Anita Street Lift Station reconstruction remains on schedule.

**The increase may cause added financial pressure on ratepayers due to COVID-19 economic impacts.

If an increase is approved, staff would notify the public of the protest vote process. Shissler is proposing a virtual workshop on May 11 to review questions and concerns of the public, which would replace the pre-COVID-19 hearing in the City Council Chambers, where staff would present the results of the protest vote. 

A simple majority of voters would be required to sink an increase.

The council meeting is scheduled to begin at 5 p.m. and may be viewed by the public via Cox Cable station 852, on the City’s website at www.lagunabeachcity.net, or on Zoom on a computer or smartphone, using the ID 92092181384. Press Star 9 to make a comment, when prompted by “your phone is unmuted.” The meeting can also be heard on the radio at KX FM 104.7.