Water and sewer increases for the City of Buellton were on the front burner at the latest city council meeting.
City Manager John Kunkel told the council Aug. 26 that water and sewer expenditures have exceeded revenues as of fiscal year 2008-09 and that, currently, the rates paid by customers are not paying for the services provided.
“Since these accounts are Enterprise Funds, the idea is that they should be self-sufficient within themselves to not only pay for the service, but also be able to put funds aside for future repairs, expansions, etc.,” Kunkel said.
According to Kunkel’s staff report, year to date as of June 30, the water budget is currently negative by $76,760.37 and the sewer budget is -$164,108.08. The report also said that in previous years, meter installation and connection fees helped make up for the deficit from operating cost and revenue received; however, with the slump in the economy, those fees have been greatly reduced.
Russ Hicks clarified that the water and sewer departments are not actually running at a deficit because the funds are shifted from the Enterprise Fund to make up the difference. But the money that comes from the rate payer is not enough to sustain the water and sewer departments on their own at this time. “The concept of the Enterprise Fund is to do just a simple process: You secure the funds that you spend or you spend the funds you secure – it has to be a balance. We have not raised the rates in 14 years,” Mayor Pro Tem Ed Andrisek said, adding, “We have before us two very gradual options to bring us back into the fold.”
City staff prepared two options for the council to review; both would raise fees gradually from 2011 to 2014. All rate increases would be to the meter charge and not based on a per unit charge. The city would also ask the public to approve an automatic CPI (Consumer Price Index) increase to the water and sewer funds beginning in 2015.
When asked her opinion, Finance Director Annette Munoz told the council, “If we don’t make changes, it’s not going to get any better.” She added, “We already had a loss in the Enterprise Fund as of 8/09, and that I think was the first red flag. Why do we have a loss? So in our analysis we determined, first of all, that the non-operational revenues, is what was keeping us afloat in the Enterprise Fund, but we want the revenues from ongoing operations to match our expenditures; ongoing being the rate payers.”
The council approved the second option that was offered, which would have the following rate rises:
• March 2011 - $2 increase per month in water
• June 2011 - $1 increase per month in sewer
• Jan. 2012 - $1 increase per month in water
• June 2012 - $2 increase per month in sewer
• Jan. 2013 - $2 increase per month in water
• June 2013 - $2 increase per month in sewer
• Jan. 2014 - $1 per month increase in water
• June 2014 - $2 per month increase in sewer
These increases would be a total of $6 per month for water rates and $7 per month for sewer rates. However, because of Proposition 218, nothing can be finalized until the city sends out a ballot to each property owner and 51 percent must approve the increased rates for it to go into effect.
“Now because of Proposition 218, every property owner will have a right to protest this, and basically a protest is a ‘no’ vote on the rate increase,” Mayor Victoria Pointer said.
The council also directed city staff to look into Buellton’s current number of rate payers and make sure all residences had the correct number of connections and readings, to ensure that the city is collecting the full amount of revenues it should be receiving.
The process will take 60 to 90 days before the ballots are mailed to property owners, and then property owners will have 45 days to respond. There will also be a public hearing scheduled during this time for Buellton residents to come and voice their opinions on the water and sewer rate increases.
Additionally, the city council approved a statue and a location on Avenue of Flags for the memorial for Santa Ynez Valley native, Marine Cpl. Aaron Allen, who lost his life in the line of duty while stationed in Iraq in 2008.
The memorial will be placed beneath the American Flag on the second median on Avenue of Flags. A large art sculpture of Allen’s helmet, boots and rifle will sit beneath the flag. The sculpture will include a dedication and picture of Allen for all to remember the great sacrifice that he and his family gave.
Allen’s mother, Cathy, worked with city staff to find a suitable placement for the memorial and thanked council members for their time and effort. “I did take a walk on the avenue, and I agree with the city council, I like (it) by the flag. I think that would be the most appropriate area for this,” Cathy said, adding, “I would be honored to have his statue on Avenue of Flags.”
The statue will be ordered, and when it arrives, a dedication ceremony will be scheduled. The council also agreed to come back at a future date to discuss an additional memorial for other fallen service men and women that would be located on the same median on the avenue.