Wastewater rate hike, without rebate plan, to go to Newport council

Newport Beach city leaders Tuesday will again consider a proposal to increase wastewater rates for local water customers.

In January, the City Council voted 4-3 to approve a plan to roughly double wastewater rates over a five-year period. The council also initially approved giving each residential customer a one-time rebate of about $55 to cover the cost of the rate increase for three years.

However, when the ordinance returned to the council for final approval in February, the vote was 4-3 to reject it.

Councilman Ed Selich, who initially voted in favor of the rate increase, switched his vote in an effort to kill the rebate, he said.

Mayor Diane Dixon had proposed that the rebate be funded with about $1.7 million in surplus from the city general fund.

“It’s bad public policy to commingle those funds,” Selich said of the general fund and the sewer enterprise fund, which is used for capital improvement projects.

Now, city staff is bringing the proposal to increase wastewater rates back to the council — without the rebate.

“We feel that most people are in support of the increase,” said George Murdoch, the city’s utilities manager. “We’re going to make another run at it.”

Residential and commercial water users in Newport Beach are charged on their regular bills for removal and treatment of wastewater, which includes sewage and water from sinks and showers, known as “gray water.”

A typical single-family home currently pays about $9.75 per month for wastewater service. The proposed rate increase would mean the same home would pay $11.89 per month beginning in May and for the rest of 2016. The monthly rate for most customers would increase to $13.16 in 2017, $14.64 in 2018, $16.21 in 2019 and $18.02 in 2020.

A need for an increase in sewer rates was cited when the city completed its Sewer Master Plan in 2010. The plan identified several capital improvement projects necessary to upgrade the city’s 50-year-old sewer system. However, the council at the time did not increase the rates, partly because of the recession, officials have said.

Since the most recent rate increase in 2005, the city has outsourced various water services and reduced expenditures in the capital improvement program, but it wasn’t enough to stave off an increase forever, Murdoch said.

In 2013, the city contracted with HF&H, an Irvine-based consulting firm, to study rates for wastewater and recycled-water services. Based on the study, the City Council decided in June 2014 to halve the cost to ratepayers of recycled water.

However, the study concluded that the city needs to bulk up its fund for wastewater service if it wants to pay for system improvements that are expected to cost about $30 million over the next 30 years. HF&H projected the city would have to dip into reserves to fund the projects, which by 2017 could wipe out the $900,000 wastewater reserve.

“It’s critical that this [rate increase] gets passed,” Murdoch said. “My urgency is that the reserves are dwindling and the longer we wait, the longer we have to postpone important projects. Soon our expenditures will exceed our revenues and we’ll have to dip into the general fund.”

Tuesday’s City Council meeting will begin at 7 p.m. at City Hall, 100 Civic Center Drive.