Lodi residents’ sewer rates could go up by more than 70 percent

Residents may soon see a large increase on their utility bills to pay for the pumps, pipes and treatment plant that handle Lodi’s sewage. Here’s a breakdown on the rate increases.

What is the increase?

In the next four years, Lodi residents are facing a 73.3 percent rate increase that would take a three-bedroom home’s sewer bill from the current $27.74 to $48.06 by July 2012, which in total is a $20.33 increase.

“We are operating in a deficit, and that’s no way to operate a city,” Mayor Larry Hansen said. “Yes, it’s going to be painful. But it’s just something that needs to be done.”

The rate increase will partially be used to pay off $40 million in bonds for the White Slough treatment plant upgrades, said Public Works Director Wally Sandelin. The money will also be used for operations and maintenance, and to hire new employees that are needed to run the upgraded plant. A 25 percent reserve will also be established in case of emergencies, like a sewer main collapsing, Sandelin said.

Why is it needed?

City staff say the increase is needed because of state-mandated upgrades. The city took out $40 million in bonds to pay for the upgrades, and the current sewer rate is not collecting enough to run the utility and pay the debt service.

Sandelin said the city’s 73.3 percent increase over four years is the maximum amount the city can raise, and he will reevaluate each year to see if the rates can be lower.

Lodi’s wastewater fund

In Lodi, state mandates have also come at a time when the utility has already been collecting less than what is needed to cover the costs of running and maintaining the plant.

The wastewater and operations fund, along with the account paying off the bonds to upgrade the plant, have about a $14.2 million deficit.

The city plans to combine those funds with the $17 million still available in the sewer’s infrastructure replacement fund. With these combined, the city will be left with $2.8 million for the utility.

State-mandated upgrades

Since 2004, the city has completed $40 million in upgrades to meet California’s requirements and to expand the plant.

Other cities are also raising rates to pay for millions in plant upgrades to meet new state standards that require wastewater to receive additional treatment before being discharged from plants.

The state requirement is a “tragic example of unfunded state mandates,” Hansen said.

During the last overhaul of the treatment plant in the mid-’80s, the city received funding from the federal government for 87 percent of the project, Sandelin said. But this time, there was no state or federal funding to cover the project .

Hansen also said customers have received a break because they could have been paying the rates for the past four years to fund the plant upgrades and the additional cost of operating it. All the upgrades will be complete in May, Sandelin said.

Some cities, like Galt, which is getting ready to start construction to bring its plant up to state standards, has charged a fee on customers bills since 2005 for plant upgrades. The fee on the city’s bills that come out every two months is currently at $25.

Reaction to the increase

As a member of the newly formed anti-tax group Citizens In Action, Arlene Farley said she does not understand why the city would need to more than double its rates when it has known there was not enough money in the fund.

“Why has it gone on so long? Why hasn’t someone been watching this?” Farley said.



The council has always known it would have to raise rates. It was just a matter of when, said Councilwoman Susan Hitchcock. She said city staff took the approach of using all the reserves in the sewer fund instead of bringing a rate increase to the council.

“People are having a very rough time, and it’s a huge increase,” she said.

She has suggested tying the sewer rate increase with a decrease in the water rates because she believes the city has been collecting more than it will need for the PCE/TCE water cleanup.

Sandelin said the city has not started the cleanup, so it does not know if it is overcollecting. He said staff is looking at the issue and will decrease rates in the future if possible.

Protesting the increase

If half of the city’s ratepayers protest the increases, they will not go into effect.

Ratepayers can send protest letters to:

Lodi City Clerk

P.O. Box 3006

Lodi, CA 95241



All protests must be received before the July 15 public hearing at 7 p.m. in Carnegie Forum, 305 W. Pine St.

If a majority of rate payers protest the increase by that date, it will not go into effect.

What happens if the city does not increase the rates?

If the sewer fund keeps operating at a deficit, it will run out of money by the end of 2010, said city spokesman Jeff Hood.

The city would also most likely be in violation of the its wastewater permit, which is issued by the state, because it would not have enough resources to hire the personnel and the equipment to complete tasks like monitoring the groundwater. Violating a permit can result in fines of up to $1 million a day.

Contact reporter Maggie Creamer at maggiec@lodinews.com or read her blog at www.lodi-news.com/blog/citybuzz.

Editor's Note: This story was updated at 10:49 a.m. Monday, April 27 to correct the percent change of the rate increase.