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Wally Sandelin: Addressing Lodians’ Proposition 218 concerns

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Posted: Tuesday, November 19, 2013 12:00 am

John Slaughterback in his Letter to the Editor and Mr. Dave Wellenbrock in his guest column of Nov. 12 made many erroneous statements, to wit the purpose of my response.

First, it is absolutely untrue the city’s Proposition 218 notices will raise utility rates. The Proposition 218 notice is a notice of proposed rate schedules and does not constitute a utility rate increase. It does set maximum limits for future rate increases at 3 percent, even if the inflationary index exceeds 3 percent.

Second, the city has acted transparently by regularly presenting at numerous public meetings the financial models for the water and wastewater utilities that contain specific information on the forecasted increase in costs for personnel, utilities, materials, supplies, debt service and lists specific system improvement projects. As recently as Oct. 15, this information was presented at the Lodi City Council’s shirtsleeve meeting and is available online at the City Council Agendas and Minutes site.

Third, the financial models present the best information available that support the notion of continued modest increases in rates. Again, the council will not be voting on Dec. 18 to increase rates by 3 percent for each of the next five years. Each year, actual numbers from the prior year and budget numbers for the next year provide the facts to council so a decision can be made as to whether there should be no rate increase or a modest increase.

Fourth, the maximum rate increase of 3 percent per year would not increase revenue by over $1 million, but could raise approximately $780,000 in additional revenue the first year only if approved by council, and that is not happening on Dec. 18. The objective of the rate schedule is to make it possible to offset inflationary increases in water and wastewater costs should that become necessary. The average annual water rate increase has been 1.2 percent over the past six years.

Fifth, Lodi residents are not subsidizing new developments’ obligation to pay for infrastructure required to serve the demands presented by new development. The referenced reduction in residential development impact fee levels will not reduce the obligation of new development to reimburse the city for past and future investments in water, wastewater, streets, police, fire and other infrastructure.

Sixth, significant system improvements are planned that will, in the long term, significantly reduce expensive maintenance cost and evenly spread utility costs (rates) amongst our customers. These system improvements include the water and wastewater replacement program, water meter installation program, old water meter retrofit program, and system-wide well maintenance. And there are administration costs to run the utilities with much of those costs related to meeting state requirements tied to the operation of the wastewater treatment plant and the recently-completed water treatment plant.

Finally, the city’s $30 million upgrade to the wastewater treatment and disposal facilities was a state mandate required to protect Delta water quality and habitat. At the time, there was no other alternative to a Delta discharge during the non-irrigation months. It has turned out to be a good investment, with the Lodi Energy Center paying the city more than $1 million per year for the use of its high-quality treated wastewater.

Fortuitously, the city may now substantially reduce its discharge to the Delta and save significantly on the costs of producing all high-quality effluent. A feasibility study evaluating the investment of $11 million into storage pond and conveyance improvements will be presented to the council next year.

Wally Sandelin is the director of the city of Lodi’s Public Works department.

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