Forum projects possible utility hikes
July 17, 2013
Though Carson City's water and sewage rates will increase under a plan reviewed at a public forum Tuesday night, the city's finance director touted a small silver lining.
"Actually, now is probably a good time to borrow money," said Nick Providenti, one of the panelists at a Sierra Nevada Forums event in the Community Center. "That's the good news."
The forum, which attracted an audience pegged by organizers at 109, dealt with water and sewer service rate hikes that will go to the city's Board of Supervisors. The supervisors will consider a five-year capital improvement plan to upgrade water pipes and related systems, as well as improve aging equipment and systems at the wastewater treatment plant.
David Bruketta, utilities manager and sewage plant operations manager for environmental matters, presented slides provided by FCS Group, the city's consultants, projecting water rates at a single family residence will increase the monthly bill about $3 from about $36.05 to $39.24.
But he also showed slides that, because of equity provisions built into the rate consultants' proposal, would actually decrease the rates to medium residential sewer users from about $35.29 to $26.88, or nearly $8.50.
The rate structure will have users paying more in many cases, or less in some cases, to help pay for $17 million in water infrastructure needs and $48 million in the aging sewage plant's overdue upgrades.
Those amounts are in the five-year capital improvement plan for the two utilities. The alternative of stretching the payment plan over a decade was rejected by the Board of Supervisors when the consulting firm brought in its rate study and recommendations.
The consulting group and city staff are fashioning final ordinance language for board consideration in September.
Public Works Director Andy Burnham, Bruketta and Providenti handled the heavy lifting in presentations and the fielding of audience questions in the Bob Boldrick Theater at the center. They were joined on the panel by Tim Russell of Resource Concepts and Eric Leveque of Carolla Engineering, both men with experience in the fields under discussion.
Much of the event dealt withe the sewage treatment plant and was handled by Bruketta, who said facets of the plant were built in the 1970s and '80s. He was asked early in the post-presentation part of the evening if rates would stay at the raised level after the five-year plan.
"Yes," he replied. He said the plant infrastructure upgrade would be just repairing and replacing, with no "bells and whistles" included. It was then that Providenti talked of bonding, saying the extra revenue would service the debt over time.
"So these amounts are going to be needed at least over 20 years," he said, adding the "good news" comment because of low rates. He did, however, add that interest rates have ticked up a bit in recent weeks.
Another question dealt with why there is nothing available to handle deferred maintenance and the depreciation in the plant. Providenti and Burnham both said previous city supervisors had decided years ago to keep rates low and spend down reserves.
"What they did was, they used the fund balances," Providenti said. "We just went through the money. Four or five years ago we were out."
Another question dealt with rate hikes over the past decade, but the answer went back 20 years and included the period when there were reserve balances. It traced the period during which balances were depleted at just about the time the 2007 recession hit.