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City commissions study of water and sewer rate structure

December 3, 2012

Public Works Superintendent Deston Dishion takes “pride in providing good, clean drinking water and it starts right here” at Well No. 2, located on Sierra Street. It siphons that fresh water from 500 feet below ground. Photo by Marilyn Blake Philip

An upcoming water and sewer rate study for the City of Bishop is expected to provide rate equity for residential and business customers and help establish rates for the next eight years.
The city has hired a consultant to conduct a 2013 Water and Sewer Rate Review for the City of Bishop. One goal of the study is to ensure “rate equity,” so that billing rates in all customer, or user, categories are fair, said Public Works Director David Grah. The second goal is to establish rates which will adequately maintain the water and sewer system. It is anticipated that the study, which should begin in the next month or so, he added, will be completed by the end of 2013 in time for the 2014-15 fiscal year.
Since the study will “include the review of user categories and since this review of categories is expected to be complex,” it will be conducted by the consulting firm of Willdan Financial Services, out of Temecula, explained Grah.
Consumers’ main complaint is that the rates aren’t fair, that they were charged too much compared to the rates others pay, Grah explained. “Of course, fairness has been important,” he said, “and with this study, the city is looking into ways to improve the billing rate system; therefore some may go up and some may go down” as a result of the study.
“To avoid large rate adjustments and for financial stability, it is important that water and sewer fees be reviewed periodically,” Grah explained.
“When the 2004 rate study was done,” because of the long time between reviews, “the rate adjustments suggested by that 2004 study were large and were unpopular with many customers,” said Grah. Putting it into perspective, however, Grah explained that the 2004 suggested rate increases turned out to be considerably higher than the rates that were actually implemented at that time.
To prevent large adjustments in the future, when the City Council adopted the 2004 rates, it also required a 2008 rate review to establish 2010-11 through 2013-14 fiscal year rates, as well as the current 2013 rate review to “suggest rates for the 2014-15 through 2019-20 fiscal years,” Grah said.
Willdan will conduct the review using “recognized techniques,” said Grah. Since the rate study is “mostly a financial calculation, Willdan will help with public meetings and notices but will not be surveying the public.” The consultants will, however, investigate the cost of maintaining the city’s water and sewer system; determine what that cost should be; and examine statewide information to determine local rates, said Grah.
From that, Willdan will determine future rates appropriate to cover the expenses of maintaining the city’s water and sewer system on an ongoing basis.
“The study should be complete in mid-2013 with the remainder of the time spent refining the study and going through the related hearing and implementation process,” said Grah. In other words, once Willdan completes its study, the results will be submitted to the Water and Sewer Commission, which will respond. Public Works will also make revisions. The review goes back to Willdan for any needed modifications. Finally, commission-approved findings will result in a rate recommendation which the commission will make to the City Council.
The City Council may then make any changes it deems appropriate. Next, per Proposition 218, rate-change notices will go out to customers.
At the end of a 45-day period, and before the new rates are set, the City Council will hold a public hearing on the proposed rates (in late 2013). Public input is encouraged. If any adjustments are identified in the study, said Grah, they should be implemented about July 2014.
Not only will this study recommend adjustments to the current single-family residential base rates, but also “review factors used to apply base rates to other customer categories,” said Grah. “In fact, since rate equity is one of the most major topics of the Water and Sewer Commission discussion, the review of rate factors is the primary focus of the 2013 rate study.
“More specifically, equity would be addressed by adjusting the Equivalent Dwelling Unit factors used in our various user billing categories as well as reviewing and refining the current 22 categories. New EDU factors would be developed in part with water meter information that is now available from all current use categories.”
All rates are calculated using the EDU factors. EDU factors are based on the rate that a single family unit pays and the remaining 22 categories are based on that rate. Under the current water and sewer rate structure, the rate schools are charged, for example, is based on the number of students. The rate per student is .04 of the single family residence EDU. Consequently, if a school has 500 students, it is billed at 20 EDU, or the equivalent of 20 single family residences.
Multi-family residences pay .80 EDU per unit. Bars and restaurants pay by the seat, gas stations pay by the aisle, laundromats by the washer and car washes by the stall. Other categories include churches, hospitals and convalescent homes and meeting halls.
Willdan was chosen by a panel of Water and Sewer Commission, city and Eastern Sierra Community Services District staff members, taking the bid at $29,885. That cost will be split evenly between the Water and Sewer Departments.
It is important that rates are as low as possible for customers, said Grah, and the city needs enough funds “to maintain the $40 million investment that customers have made over the years in the water and sewer system.”
Public Works Superintendent Deston Dishion said $40 million may seem like a lot, but it isn’t. To put the sum into perspective Dishion reeled off an abridged list.
• The city maintains three active wells: No. 1, in the police department parking lot; No. 2, on Sierra Street in the lot across from Inyo-Mono Title Company; and No. 4, the main well, at West Line and McClaren streets. A fourth, undeveloped well (No. 3) for which the city owns water rights, is on Sunland Road.
• There is a one-million gallon water source tank, located a bit west of Manor Market, that came with a ticket price of about $1 per gallon.
• SCADA, the Supervisory Control and Data Acquisition computer, was a $150,000 investment. It is the brains of each well, controlling the well and “when we produce the water,” explained Dishion.
• There are about 23 miles of pipe disbursing water throughout Bishop. An eight-inch length of water pipe costs the city approximately $100 by the time it is completely installed underground. A large portion of that $40 million lies unseen underground.
• A $100,000 portable generator is at the ready in the event of a major power outage, said Dishion.
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