Hearing set on rate increases

A public hearing on Orland's proposed water and sewer rate increases is set for May 21.

Notice of the hearing and written protest procedures will be sent in city water bills later this month, officials said.

If the fee increases are approved, the average residential customer will likely see only a $5 increase in his or her bi-monthly bill, Finance Director Daryl Brock said Monday night.

A big percentage of residential water users do not use more than the minimum 15,000 gallons allotted bi-monthly, Brock said.

As a result, monthly water bills should not go up more than $2.28 per month, he said.

Brock also is suggesting the city needs a 18.22 percent increase in water rates to keep up with maintenance costs and set aside money for future replacement expenses.

He added this is less than the 21 percent recommended by the Consumer Price Index he used for determining water and sewer costs in cities around the state.

On March 5, Brock presented information to the City Council proposing to raise the rates from five to 20 percent.

He also compared Orland's rates to those of Willows which were far higher because its water is provided by a private water company.

Problems with city wells prompted the renewed discussion of water rates in recent months.

Orland's Railroad Avenue municipal well had to be shut down in December because state officials deemed it no longer safe to use, and a second well had to be repaired a short time later.

This leaves Orland with six out of seven wells still operating, Public Works Director Jere Schmitke said.

But more wells will need to be drilled on the city's west side for future growth, he said.

The city also is seeking state grant funding to do a study of its water and sewer infrastructure needs in the next 25 years, Brock said, but that is yet to be approved.

In the meantime, growth in Orland has slowed so it is not bringing in as much capacity revenue as it has in the past.

Brock said the capacity or hook up fees are separate from the water and sewer service rate equation.

Associate City Attorney Gina Gingery told council members the proposed water and sewer fee increases comply with new state guidelines and Proposition 218.

The legal documents also call for the money to spent only on water and sewer expenses, she said, after Councilman Jim Paschall expressed concern about them going to other projects.

Specifically, he said he does not want to see those monies going to a loan similar to the one granted when Orland purchased the old Purity Market building for a new police station five years ago.

Brock noted current guidelines were not in effect then, so the city was allowed to borrow $400,000 from the water fund to purchase the building and pay it back with interest.

However, the police facility has not been built because Orland has no funding to complete it.

The building is currently being leased for a small canned goods store since the city would lose too much money if it sold it in today's real estate market, city officials said.

But even if the $400,000 still remained in the water account, Brock said the city would still need to increase its rates to offset higher expenses such as electricity and fuel spikes.

Councilman Bruce Roundy suggested the city review the CPI on the water and sewer rates annually to see if increases are warranted.

Orland has not raised its water and sewer service rates since July of 2008.

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