Water rates likely to go up

Water rates for Orland residents likely will be going up, but how much is yet to be determined.

Finance Director Daryl Brock said the rates will need to be adjusted to keep up with ongoing expenses and to increase reserves for expansion or well replacement.

The city has had problems with at least two city wells in recent months.

One well on Railroad Avenue had to be closed because state health officials deemed it no longer safe. Another needed repairs, according to Public Works Director Jere Schmitke.

But the bottom line is the city's costs are exceeding its revenues, Brock said.

He said because of the "ebb and flow" in new connections, Orland is not gaining the income it normally would have received.

The Crystal Geyser sparking water plant project would have provided the city with $182,685 in water and sewer hook-up capacity charges, he said, which would have relieved a portion of the cash flow problems.

This was over and above the $211,143 in impact fees the project would have generated, he said.

A judge, however, determined that project should have been subjected to a full environmental review, rather than the mitigated negative declaration done by the city.

Crystal Geyser opted to pull out rather than undergo that expense.

Brock suggested the council look at tying the water rates to the Consumer Price Index so adjustments can be made annually for both water and sewer services.

He also provided a sample CPI schedule to compare increases for these types of services since the last time the city raised these rates in 2008.

A third exhibit looked at water revenues generated by various rate increases, and a fourth compared Orland's water rates with those of Willows, where California Water Service provides water to that city's residents.

Orland residents pay $24 every two months for services inside the city limits, Brock said.

If the rates were increased by 20 percent to catch up with the last three years, the rate would go to $29.04, he said.

Sewer fees are $24.85 and would go to $30.07 with a 20 percent increase, Brock wrote.

Residential and commercial customers outside the city limits pay $48 and that would rise to $58.08 with the 20 percent increase.

If the city went with the 20 percent increase, it would generate approximately $93,941 in the six months ending in Dec. 31, 2012, Brock said.

Had the city been generating 20 percent more income in 2010, it would have had $127,120 in more water/ sewer income, Brock's report said.

Willows residents pay considerably more, noting Willows' rates exceed Orland's by a range of 285 to 563 percent.

Of course, the Willows water is provided by a private company which charges more than a municipal agency, Brock said.

The council approved staff do a water study to determine what increases are needed to cover ongoing costs and replacement for the future.

Once the study is done, the city can hold a public hearing to see if residents protest, City Attorney Greg Einhorn said.

There are roughly 2,600 Orland water users, Brock said.

If 1,300 of those customers object, Einhorn said the rate increase cannot go forward.

The city can look at increases from five to 20 percent plus ongoing adjustments in the future, city officials said.

Contact Rick Longley at 934-6800 or rlongley@tcnpress.com.