SANGER – Water and sewer rates for Sanger residents will increase over the next five years beginning July 1, with industrial users seeing the biggest impact.
Sanger City Council voted 4-1 to increase the rates during its regular meeting June 15, ending a months-long process that looked at municipal costs, future needs and the utility rate structure. Water and wastewater rates will increase between fiscal year (FY) 2023-24, which begins July 1, and fiscal year 2027-28. This is the first increase in Sanger’s water and wastewater rates since 2005 and 2007, respectively.
“The last time we approved rates – for some reason between that time and now – nobody bothered raising them; that’s the problem,” Councilmember Michael Montelongo said at the meeting. “To avoid raising them now is going to be a bigger problem.”
Dan Bergmann, who compiled the cost-of-service analysis for Sanger, said most residents will see minimal changes in their water bills and will not experience an increase in their sewer bills until the fifth year of the rate increase plan.
“Candidly, a single family customer won’t even notice the difference; it’s just not that much,” Bergmann said.
The city primarily needs to increase the rates in order to generate more water revenue so that Sanger can be in compliance with California’s Sustainable Groundwater Management Act (SGMA). Bergmann said the city’s costs associated with SGMA are about $1 million a year. Increased wastewater revenue is needed to fund repairs to the Industrial Wastewater Treatment Facility. According to a memorandum included in the report, the facility requires over $11.8 million in repairs.
“It’s kind of telling when you see that, really, the rate increase is actually being driven by the SGMA requirements,” Mayor Pro Tem Daniel Martinez said. “When you say $1 million a year, one-third of the (utility) revenue is going to SGMA.”
Total water costs will continue to be based on a fixed monthly charge plus a volumetric rate that is multiplied by the amount of water used. The volumetric rate for single-family properties will have three tiers based on thousand-gallon usage, compared to five tiers previously.
Beginning July 1, the single-family charges per thousand gallons of water will be $0.55 for up to 6,000 gallons used, $0.92 for 6,000 to 30,000 gallons used and $1.42 for more than 30,000 gallons used. The new single-family rates are a 29% increase from previous years. The rate will continue to increase in following years, first by 10% between FY 23-24 and FY 24-25 and then by 4% in years after.
All other properties will no longer be charged in tiers and will have one rate regardless of usage volume. The new rates will be $0.93 per thousand gallons for multi-family and commercial properties, $1.37 for schools and $1.54 for industrial properties.
Bergmann said industrial properties are taking the biggest increase at 161%. This is because the cost-of-service analysis showed that industrial properties, which typically use the most water, were only paying $0.59 per thousand gallons previously.
Martinez said that based on the data from the analysis, it appeared that other users were “subsidizing” the water cost for industrial properties.
The fixed monthly charge, which is based on water meter size, will not increase until FY 2024-25, when it will go up by 10%. For the following three years of the plan, it will increase by 4% each year. For example, for a 1 inch meter, the fixed charge prior to July 1, 2023, was $24.27 and it will remain at that rate until July 1, 2024, when it will increase $26.70. The charge will be $27.77 in FY 2025-26, $28.88 in FY 2026-27 and $30.04 in FY 2027-28.
The general structure of wastewater rates will not change and most properties will not see an increase until FY 2027-28, when residential and commercial property wastewater rates will go up by 4%. Schools, which are charged per student, will no longer be divided into K-12 cafeteria/no cafeteria categories; the elementary school rate will be $1.00 per student per month and the middle and high school rate will be $1.45. The school wastewater rate will also increase by 4% in FY 2027-28 and remain steady until then.
Industrial properties, which are charged based on three categories, will also see large rate increases for wastewater usage. The biochemical oxygen demand and suspended solids category charges, which are measured per thousand pounds, will increase by 298% and 148%, respectively.
Councilmember Esmeralda Hurtado, who was the only “no” vote on the rate increase, said she didn’t think it was right to raise rates on the community when Sanger has not invested in its infrastructure over the years.
“I think we need to do better in providing the services to the community that they need,” Hurtado said. “I think it’s unfair for the industrial side to take the biggest impact. I understand that they have used our facilities quite a bit; however … we should have been better planned, better equipped, so that when we come to a new study, we have the rates that are equally balanced, equally fair for each category that’s being considered tonight.”
Bergmann said that rates collected from each utility must be kept within the utility — the city cannot use that revenue for anything else. Additionally, the rates for the utility cannot be more than what is needed, within reason.
Sanger consulted with IGService (IGS) of Walnut Creek to analyze the water and sewer costs of service and propose an adjusted rate plan.
In compliance with California Proposition 218, known as the “Right to Vote on Taxes Act,” the city sent out a notice detailing the proposed rate changes in April to allow for a 45-day period before the public hearing June 15.
Having received no written protest of the rate increases and determining there was not majority opposition from property owners, the city council was able to vote on the increases after the public hearing. The city council also passed the low-income water rate program.
Sanger utility customers will see the rate increases on their bills in the first full billing cycle after July 1.