LAKE COUNTY, Calif. — The city of Lakeport is moving forward with the process of increasing rates for utility customers.
In a unanimous vote at its Aug. 17 meeting, the Lakeport City Council approved a resolution declaring its intention to adopt increased water and sewer rates over a five-year period, 2022 to 2026.
Finance Director and Assistant City Manager Nick Walker said they are only allowed to set the utility rates on a five-year basis.
City officials said the last utility rate study for Lakeport was completed in 2012, and utility rates have not increased since 2017.
The council also has set a public hearing on the new rates for Oct. 19 and directed staff to provide notice to ratepayers pursuant to Proposition 218, which sets the requirements for notifications and how to protest.
The council also accepted a resolution establishing guidelines for the submission and tabulation of protests in connection with rate hearings conducted pursuant to the California Constitution.
The city hired Willdan Financial Services to do the rate study. The firm gave an initial presentation on the utility increase study on May 4, at which time the council gave the go-ahead to complete the final study.
Walker told the council that staff had worked closely with the consultant to prepare a study that meets the regulatory requirements.
Daryll Parker and Michael Cronin of Willdan attended the meeting via Zoom to explain the study and their proposal.
Their presentation and information about the study has been posted here on the city of Lakeport’s website.
“It’s been awhile since you’ve had a rate study,” said Parker, explaining the city hasn’t looked at its rates in nine years.
If the city keeps to the status quo and makes no changes, Parker said it won’t be able to meet its debt service requirements and would have no cash for operations and capital.
Because the city hasn’t changed its rates in some time, the rates would have larger increases at the beginning of the five-year increase, which is from 2022 to 2026.
While the rates are not as much as they want, “they’re going in the right direction,” Parker said.
Based on bill comparisons created by the study, an average single-family residential water customer — all of whom are billed at the ⅝ by ¾ inch service charge rate — with a monthly flow of 800 cubic feet has an existing bill of $53.09, which would rise to $61.48 in the first year, and to $71.49 by the fifth year in 2026.
For sewer, in the first year that same customer, with the same monthly water flow, would see their bill increase from $74.25 to $79.50, and to $86.05 by year five.
The combined bills for that average customer would rise from $$127.34 to $157.54 over five years, with the largest increase, $13.64, coming in the first year.
Assuming that proposed 10.71% increase, Willdan reported that Lakeport will remain in the middle of the pack when compared to water systems: Kelseyville, north Lakeport (operated by Lake County Special Districts), Cloverdale, Esparto, Ukiah, Willits, Hidden Valley Lake, Healdsburg, Calistoga and St. Helena.
Parker said the next steps include setting the October public hearing, mailing out the Proposition 218 notice, conducting the public hearing, and then adopting and implementing the new rates.
Councilman Michael Froio asked if COVID-19 and drought will have an impact on the rates.
“We don’t know yet,” said Parker, adding that it’s possible and it may need to be addressed in a few years based on what the city sees in its system.
Walker said the city’s calculations included base customers, not the proposed South Main Street annexation area, as they felt that would be presumptuous.
He said he didn’t see the drought creating more revenue due to seeing more conservation.
Froio asked if the city was seeing less revenue due to conservation. Walker said it was too early to tell, that the city has asked customers to voluntarily cut back 15% and he believes there may be more state requirements once the gubernatorial recall election is past.
City Manager Kevin Ingram said the city saw quite a bit of reduction in water use due to behavioral changes following the last rate increase in 2012 and the last drought in 2014. Since then the city hasn’t seen a significant growth in use as those behavioral changes have remained in place.
Councilwoman Stacey Mattina asked about planned utility projects. Walker said they include work on the Scotts Creek wells; water main replacements on Armstrong Street, Lakeshore Drive, Lakeport Boulevard and Lupoyoma Circle; and equipment replacement; among other system upgrades.
Both Councilman Michael Green and Mayor Kenny Parlet agreed during the meeting that the council needs to have another rate study done at the end of the five-year rate increase period.
“Costs are just escalating at unbelievable rates,” and the city doesn’t need to wait nine, 10 or 11 years to study the rates again, Parlet said.
Mattina said the last time a rate study was done nine years ago it was very painful, and while it was put off, “It was time to get to it.” Now it’s not as painful, it’s doable and well done, she said.
Ingram said they can add future studies into the city’s capital expenditure program.
Froio made separate motions to accept the two resolutions, which the council approved 5-0.
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Lakeport City Council votes to move forward with water, sewer rate increases
- Elizabeth Larson
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