Wastewater service could soon become more expensive for Newport Beach water customers.
The City Council on Tuesday will hold a public hearing to accept comments from ratepayers and calculate the number of residents who have sent letters to the city in protest of a proposal that would double wastewater rates over a five-year period.
If the council approves the increase, homeowners would see their bills rise about $2 per month beginning in March, according to a city staff report.
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.”
In October, the council voted to move forward with the plan to raise rates and directed staff to send notices to 27,193 customers. If 50% of property owners — about 13,500 — are against the increase, the council cannot pass it, according to state law.
A typical single-family home in Newport pays about $9.75 per month for wastewater service. The proposal to increase the rate structure would mean the same home would pay $11.89 per month beginning in March 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.
George Murdoch, Newport’s general manager of utilities, said the city does not have plans to increase rates again immediately after 2020.
The rate increase would bring an additional $113,346 in revenue to city coffers in 2016. By 2020, the city would see an increase of about $1.8 million, according to the staff report.
The additional rate revenue is necessary for the city to improve its aging water system, Murdoch said.
“I don’t like to raise rates,” he said. “But this is a necessary increase. It’ll make our sewer system financially healthy and maintain our reserves.”
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 indicated 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 the city has in wastewater reserves.
Since the last 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 a rate increase forever, Murdoch said. The city Finance Committee recently looked at outsourcing more water-related services but decided it wouldn’t be cost-effective.
Tuesday’s City Council meeting will begin at 7 p.m. at 100 Civic Center Drive.
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