Painful as it’ll be for many residents and businesses, raising water and sewer rates is in Sacramento’s long-term best interest to ensure safe water and encourage conservation.
But if they approve the rate hikes Tuesday night, City Council members must commit to spending as much of the tax on utility bills as needed to help poor families, and to doing all it can to let residents know the aid is available.
Otherwise, the utility tax looks more like a backdoor way to fund other programs, as critics say.
Under the proposal, water rates would increase by 10 percent a year and sewer rates by 9 percent a year for four years. At the end, the typical residential customer would pay $21.22 more a month for water and $9.23 more for sewer service – from a total of $68.15 a month now to $98.60 in July 2019.
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With the proceeds, the city plans to finance $265.5 million in water projects, mostly water meters and related lines, plus $53.5 million in sewer projects. Finally getting the entire city on meters is important – for fairness and for water saving.
Approved by city voters in 1998, an 11 percent tax is automatically tacked on to utility bills (which cover garbage and recycling, as well as water and sewers), with the revenue going to the city’s general fund, which pays for basic services.
A local program shaves the utility bills for families earning as much as twice the federal poverty level, but only about a tenth of those believed to be eligible are taking advantage of it.
In 2019-20, the proposed rate hikes are projected to generate an additional $5.9 million in utility tax revenue, according to the city.
Starting in 2013, the city started using a slice of that money for a rate assistance program that now lets families earning as much as twice the federal poverty level save as much as $13 a month on their utility bills.
In 2014-15, the city spent about $203,000 on the program, a pittance of the total utility tax windfall of $24.8 million. Since 2013, about $596,000 has gone to the subsidies, plus program administration.
Now, about 1,700 customers take part in the program, but 10 times that number are believed to be eligible. The city is doing more outreach, including getting the Sacramento Municipal Utility District’s list of customers who are in a similar assistance program for power bills. The city plans to contact those households directly and expects participation in its program to increase significantly.
The citizens’ Utilities Rate Advisory Commission is urging the council to also direct the Utilities Department to look at expanding the assistance program to include nonprofit groups that house the poor, as well as tenants whose rents are often raised by landlords to offset higher utility rates. Those are both worthy ideas that should be pursued quickly.
The city also raised water and sewer rates between 2012 and 2014, so residents and businesses only had a two-year holiday from higher bills.
Some can afford a new round of rate hikes without too much trouble. But many others will feel the pain, and for them the city must make absolutely sure they get all the help they deserve.