TUD should retract and revise its ratepayer plan

By Union Democrat staff November 30, 2011 01:00 pm
    Tuolumne Utilities District board members next week will consider a planned series of rate increases that would boost residential water and sewer bills about 30 percent over the next four years, starting in January.
    District officials say it’s needed because the district is losing a lot of money on its operations — about $2 million a year on water alone. The district also lacks enough reserve funds to do any meaningful upgrades on the water and sewer systems, like replacing outdated water storage tanks and consolidating the dozen-plus water treatment plants under fewer roofs, which would relieve staffing needs in the future.
        These arguments for a rate hike are reasonable, yet we join the many rate payers who oppose this current plan. TUD officials should return to the drawing board for a better idea — one that takes customers into account and actually encourages public participation, rather than paying lip service to the notion.
    The average residential customer’s bill will jump a whopping 34 percent in the next three-and-a-half years under the plan. Most of that hike will come in the first year.
    Underlying the average is the base water rate, which will jump 50 percent, from $27.06 to $40.64, starting in January. It would then rise to $41.77 in July 2012, $42.93 in July 2013 and $44.12 in July 2014.
    The base rate is the amount the district charges all customers, regardless of actual water use, to cover the district’s basic operating costs. The district also charges a consumption rate, based on the number of gallons used.
    The tiered consumption rates will also rise, but the new base rate will include 400 gallons, a concession to those who use very little water. But don’t get too excited, because the proposal also creates a $500,000 “rate-stabilization reserve” fund, paid for with a new fee, which is supposed to offset losses in revenue due to water conservation efforts.
    For as carefully thought out as this plan appears, it defies logic in two critical ways: Timing and scale.
    Passing such drastic increases on ratepayers, when most are still reeling from a bone crushing recession, is unfair particularly when contrasted with the district’s own modest austerity measures — the deepest of which appears to have been a pay freeze in 2010, followed by a 3 percent pay raise this year and 2 percent next year.
    It also would be the second time rate payers have seen their rates go up in the past three years. In 2009, base water rates rose 35 percent, and sewer rates grew 9 percent.
    TUD General Manager Pete Kampa says the district is handcuffed by state staffing guidelines and an employee union.
    He noted that cuts like a pay freeze now still wouldn’t put a significant dent in the district’s operating deficit.
    Maybe so, but it would be a step in the right direction and a sign of good faith in times when most public and private sector employees haven’t seen a raise in three years (many, in fact, have seen pay and benefits cut).
    Why not cut more spending? Why not put capital projects on hold a little longer? Why not raise rates more gradually? Why not ditch the conservation penalty?
    While asking these questions, the district also should reevaluate its approach in pushing these rates through, a process which purports to be public-inclusive but seems actually engineered to do just the opposite.
    Rather than ask rate payers for an increase, the district instead says those who oppose should write a letter to the district. If half the customers object, the district will recant.
    This, by design, is doomed to fail as few will take the time to write. If, indeed, this was a democratic exercise, why didn’t the district implement a more user-friendly means of voting — like mailing simple, informal ballots?
    Those who fail to get a protest letter in the mail early enough can still participate at a public hearing, though that too lacks user-friendliness.
    The district is holding a public meeting Wednesday, Dec. 7. That’s scheduled for 9 a.m. on a weekday — hardly a time intended to attract working adults.
    A board meeting to vote on the increase is tentatively planned for a day following the hearing.
With three votes on the TUD board apparently secure, and the mechanisms for public participation basically frozen, the rate hike seems a fait accompli.
    That doesn’t mean members of the public shouldn’t fight it. They should.
    But we think also TUD — usually strong on leadership and creative thinking — should also do the right thing and take this injurious plan back to the drawing board.
    Come back with a less aggressive rate plan for year one — one that is responsive to rate payers and more sensitive to the current economic climate.