1 City of Gonzales
Utility Billing
PO Box 647
Gonzales, CA 93926
Customer Name
Address
City, State ZIP
NOTICE OF PUBLIC HEARING ON PROPOSED WATER AND SEWER RATE INCREASES Hearing Date & Time: November 20, 2023 at 6:00PM
Hearing Location:
City Council Chambers
117 Fourth Street
Gonzales, CA 93926
September 27, 2023
Dear Customer or Property Owner,
You are receiving this notice because you are either a utility customer or you own property receiving services of the City of Gonzales (City). The City Council will hold a public majority protest hearing on November 20, 2023, at 6:00PM at 117 Fourth St, Gonzales, CA 93926 to consider increases in the water and sewer rates, effective January 1, 2024. At the hearing, the City Council will review the amount of the proposed rates as well as the methodology used to calculate the rates. If the proposed maximum rates are adopted, the City may collect rates at or below the proposed maximum as needed to meet the City’s financial needs over the next five years.
In compliance with article XIII D of the California Constitution, which was added to the Constitution pursuant to Proposition 218, this notice provides you with information regarding the services provided by the City, the reasons for the changes in the water and sewerservice rates, and the methods by which you can protest this rate increase if you so desire.
System Overview
The City provides water and sewer services to approximately 2,000 accounts including homes, businesses, and industrial facilities. The current water and sewer rates are adjusted each year based on the Consumer Price Index.
July 1, 2023, rates for both utilities were increased 5.3%. Though rates are adjusted annually, the City has not reviewed its underlying water and sewer rate structures in many years. The last formal rate review was conducted in 1986 for water and 1990 for wastewater.
Current Water and Sewer Rates
Water and sewer rates are billed monthly. For water service, customers are billed a flat charge according to the size of their meter as well as a volume rate based on metered water usage. One volumetric unit is equivalent to 100 cubic feet (ccf), which equates to 748 gallons. Residential and commercial customers have tiered volume rates, where the cost per unit of water increases as more water is used. Industrial customers pay a uniform volume rate that is the same rate at all levels of use. For sewer service, residential customers are billed a flat charge per 2 account. Commercial and industrial customers are billed both a flat charge and a volume rate per ccf. Schools are billed annually based on a flat charge per student (measured using average daily attendance).
Why are rate adjustments needed?
The City relies on rate revenues to fund safe and reliable water and sewer service. The City’s water and sewer funds are currently in good financial position and operating with positive net revenues. However, both systems have aging infrastructure which requires upgrades to support existing residences and businesses as well as meet planned community growth. The City recently adopted updated Water and Sewer Capital Improvement Programs (CIP) which determined a schedule of planned projects for both the water and sewer systems. Project costs are a primary input to calculate the new rates. For the sewer system, the projects are much more extensive due to the need to construct a new Industrial Wastewater Treatment Plant and rehabilitate the existing Wastewater Treatment Plant.
Proposed Rates and Rate Structure Adjustments
The proposed rates are designed to cover the costs of planned capital projects and operating and maintenance expenses. The proposed rate structure adjustments are designed to bring the City’s rate structures into compliance with Proposition 218. It is proposed that the City update the water rate structure by increasing the fixed charges for larger meter sizes and eliminating the tiered volume rates. The vast majority of residential water use is within the first tier (about 90%). Fixed meter charges are proposed to be updated to reflect the maximum capacity of each meter size. This is in line with industry standard practice and is the policy of most other local utility providers. Table 1 provides the water rates proposed to become effective January 1, 2024. If the rate plan is approved, the City may increase the rates annually each January 1 through 2028 as shown in the table.
Table 1: Current and Proposed Monthly Water Rates
PROPOSED
Fiscal Year Current 2023/24 2024/25 2025/26 2026/27 2027/28 Effective Date July 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028
FIXED METER CHARGE
Meter Size
5/8" $22.12 $23.06 $24.68 $26.40 $28.25 $30.22
1" $23.50 $23.50 $24.68 $26.40 $28.25 $30.22
1-1/2" $24.86 $46.12 $49.36 $52.80 $56.50 $60.44
2" $26.26 $73.79 $78.98 $84.48 $90.40 $96.70
2-1/2" $27.28 $110.69 $118.46 $126.72 $135.60 $145.06
3" $29.12 $147.58 $157.95 $168.96 $180.80 $193.41
4" $30.53 $230.60 $246.80 $264.00 $282.50 $302.20
6" $31.94 $461.20 $493.60 $528.00 $565.00 $604.40
VOLUME RATES ($/ccf)
Residential/Commercial
0 - 25 ccf $2.27 $2.41 $2.58 $2.76 $2.95 $3.16
26 - 30 ccf $2.35 $2.41 $2.58 $2.76 $2.95 $3.16
31 - 49 ccf $2.56 $2.41 $2.58 $2.76 $2.95 $3.16
50+ ccf $2.84 $2.41 $2.58 $2.76 $2.95 $3.16
Industrial
All use $2.27 $2.41 $2.58 $2.76 $2.95 $3.16
3 The proposed water rates also include a schedule of drought rates, which would only be implemented during a water shortage emergency. The City does not currently have a schedule of drought rates. Under drought conditions, the meter charges would remain the same, but the volume rate would increase according to the level of water cutback, as shown in Table 2.
Table 2: Proposed Drought Rates
PROPOSED
Fiscal Year 2023/24 2024/25 2025/26 2026/27 2027/28
Effective Date Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 VOLUME RATES ($/ccf for all customers at all levels of use) Normal Water Year $2.41 $2.58 $2.76 $2.95 $3.16
10% Water Cutback $2.61 $2.79 $2.98 $3.19 $3.42
25% Water Cutback $3.00 $3.21 $3.43 $3.67 $3.93
40% Water Cutback $3.58 $3.83 $4.10 $4.39 $4.69
Current and proposed sewer rates are provided in Table 3. Sewer rates are determined based on customer service costs as well as the amount of wastewater flow and pollutants flushed into the sewer system. It is proposed that the customer service costs be recovered through a fixed portion of the monthly bill that is applied to all customer classes. For commercial and industrial customers, the flow charge is proposed to be recovered through a monthly volume rate per ccf similar to the current rate structure. For residential customers, a flow charge is estimated based on existing average daily flows and added to the customer service portion of the bill to calculate a proposed fixed monthly charge. Schools are proposed to continue to be charged a fixed rate based on students’ average daily attendance.
Table 3: Current and Proposed Monthly Sewer Rates
PROPOSED
Fiscal Year Current 2023/24 2024/25 2025/26 2026/27 2027/28 Effective Date July 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 FIXED CHARGE PER MONTH ($/account)
Residential $31.77 $38.83 $46.60 $55.92 $59.28 $62.84
Commercial $15.18 $10.57 $12.68 $15.22 $16.13 $17.10
Industrial $312.62 $10.57 $12.68 $15.22 $16.13 $17.10
Schools $0.91 $1.04 $1.24 $1.49 $1.58 $1.67
COMMERCIAL & INDUSTRIAL VOLUME RATE ($/ccf) (in addition to fixed charge) $/ccf $2.40 $3.39 $4.06 $4.87 $5.16 $5.47
Note: Schools are billed annually rather than monthly based on reported average daily attendance (ADA) 4 How do I file a protest or participate in the public hearing? The provisions of Proposition 218 provide that certain types of “Property Related Fees” such as water and sewer rates are subject to a “majority protest” process. Under the majority protest process, any property owner or customer of record may submit a written protest for the proposed increases; provided, however, that only one protest will be counted per identified parcel. If protests are filed on behalf of a majority of the parcels subject to the rates, the City cannot adopt the proposed rates.
Every written protest MUST include ALL of the following to be counted:
1. A statement against the proposed water rates, sewer rates, or both the water and sewer rates;
2. Name of the recorded owner or customer of record who is submitting the protest;
3. Identification of assessor’s parcel number, street address, or utility account number of the parcel with respect to which the protest is made; and
4. Original signature and legibly printed name of the record owner or customer of record who is submitting the protest.
Written protests may be submitted by:
1. Mail to - Prop 218 Protest, P.O. Box 647, Gonzales, CA 93926; or
2. In-person delivery during normal business hours to 147 Fourth Street, Gonzales, CA 93926; or
3. In-person at the Public Hearing, prior to the conclusion of the Public Hearing.
Regardless of how the written protest is submitted, it must be received by the City prior to the conclusion of the public comment portion of the Public Hearing on November 20, 2023. (Postmark dates will not be accepted.) Any protest submitted via e‐mail or other electronic means will not be accepted. Please identify on the front of the envelope for any written protest, whether mailed or submitted in person to the City, that the enclosed protest is for the Public Hearing on the Proposed Water and Sewer Rate Increases. Oral comments at the Public Hearing will not qualify as formal protests unless accompanied by a written protest.
The City will hold the Public Hearing on November 20, 2023 at 6pm. The City Council will review the amount of the rates as well as the methodology for calculating the proposed rates. At the conclusion of the hearing, protests will be counted and validated. If protests are filed on behalf of a majority of the parcels subject to the rates before the end of the Public Hearing, the City cannot adopt the proposed rates. If a majority of the parcels do not protest the proposed increase, the City has the authority to adopt the proposed rates. The first rate change, if enacted, will go into effect on or after January 1, 2024.
Additionally, pursuant to California Government Code 53759, there is a 120-day statute of limitations for challenging any new, increased, or extended fee, adopted, modified, or amended after January 1, 2022.