Water Rates May Rise 18 Percent By January 2013

Water rates for Suisun City customers may rise three times — to a total of up to 18 percent — between now and January 2013, one of many scenarios the local water authority will consider at an as yet unscheduled meeting in early April.

A lengthy talk between members of the Suisun-Solano Water Authority this week produced no firm decision on how to structure the authority’s finances over the next five years in the face of anticipated repairs to the water plant and water meter replacements, authority staff said. Instead, the authority voted for staff to come up with a two-year plan.

That plan envisions three separate water rate increases for customers: a 5-6 percent increase in August 2011, a 5-6 percent increase in January 2012 and a 2 percent increase in January 2013.

“It would give us a better handle on what shape the economy is in,” Joseph said.

Mark Joseph, Suisun City finance manager, presented a series of options to the authority, which includes the members of the Suisun City Council, at a meeting Tuesday, centered around the concept of how much money the authority wants to keep in reserves to help weather years where revenues shrink, expensive repairs beckon, droughts ravage or all of the above.

Though the world of water rates is complex, it’s safe to say much of the weight of the proposed increases may affect non-residential customers like the Fairfield-Suisun Unified School District and businesses like area restaurants, which pay less overall for water now than residential customers.

“Unfortunately the non-residential will be affected more because those are the customers we were trying to get to pay their fair share,” Joseph said.

Joseph said water authority finances are a delicate balance between years of cool summers, where customers use less water —and thus pay less money to the authority and may require it to dip into reserves — and hot summers where authority revenues climb and pump money into reserves.

This does not mean water conservation is bad for the authority, but it does mean that structuring water rates purely on usage is a bad idea for the long-term stability of water service in Suisun City. The question is how much should usage dictate price?

A lot of future stability rides on how big the authority decides to set its percentage of money in reserves. However, the higher the reserves, the higher the rate increases. The lower the reserves, the more risk the water authority will have if there are big repairs or other financial pitfalls.

The authority will set a forthcoming public hearing date as soon as it decides its financial plan.