WATSONVILLE—The Watsonville City Council at its Tuesday virtual meeting approved utility rate increases that will raise a typical single-family household’s bill by about $40 per month by 2026.
The increases were recommended through a rate study conducted by consultant Raftelis Financial Inc. that said they are needed for the Public Works & Utilities Department to stay fiscally solvent as it undergoes various infrastructure projects that have piled up over the years.
The City Council voted 6-1 to approve the increases.
Mayor Jimmy Dutra was the lone “no” vote. He said he wanted to delay the increases to see if federal lawmakers would indeed pass an infrastructure bill that would make them obsolete or lower the overall costs.
The new rates will go into effect on July 1.
Some residents might see their rates slightly decrease in the first year, said Public Works & Utilities Assistant Director Christian Di Renzo, but many will see a small increase in July and more substantial raises over the following four years.
Most City Council members worried about whether residents—a good portion of which live under the poverty line or on fixed incomes—would be able to afford the new rate structures with many still recovering from the economic downturn as a result of the pandemic. But they said the increases have been put off for far too long, and that the city’s decades-old infrastructure needed to be addressed.
“This is not a vote that I take any pleasure in having to make,” Councilman Francisco “Paco” Estrada said. “It is the right thing for the city of Watsonville and for future generations that will follow us … We’re hoping for the federal government to step up, but infrastructure seems to be something that in this country, along with many other very important things, is just falling off the wayside.”
Residents had an opportunity to mount a unified protest against the rate increases thanks to Proposition 218, but only 37 of roughly 15,000 property owners that receive utility services from the city mailed in written protests, according to Watsonville City Clerk Beatriz Vasquez Flores.
Only three people spoke during public comment Tuesday.
Steve Trujillo, a former City Council candidate and a member of Cabrillo College’s Governing Board of Trustees, suggested the city form a program similar to Pacific, Gas and Electric Company’s (PG&E) Relief for Energy Assistance through Community Help initiative. That program allows ratepayers to donate cash to help their neighbors who are having trouble paying their utility bills during crises.
Public Works & Utilities Department Director Steve Palmisano said the city is already helping residents access financial aid for delinquent utility bills, and that staff would conduct more outreach to try to inform residents that there is help available.
“There are more resources now than I’ve ever seen in my career available for people in a hard situation with their utility bills,” Palmisano said.
Watsonville has not approved rate increases since 2015, and the city’s rates are among the lowest in the county—the city of Santa Cruz, for example, charged nearly $60 more this fiscal year for its services.
The City Council was expected to weigh rate increases last year, but the pandemic sidelined those discussions. That decision, sought to lessen the burden on the thousands of Watsonville residents who faced financial uncertainty because of Covid-19’s spread, cost the city about $2 million in revenues, officials say.
According to the rate study, without a rate increase the Wastewater Enterprise Fund is expected to be at a structural deficit by fiscal year 2024 and exhaust its working capital reserves by fiscal year 2026. Moreover, the Solid Waste Fund will exhaust its working capital reserves in fiscal year 2023 without the increase.
The Wastewater division over the next 10 years will begin three major projects that must be completed:
- Complete replacement of the Wastewater Treatment Plant’s (WWTP) electrical infrastructure, including the PG&E transformer, and standby generators at a cost of $15.5 million, needed by fiscal year 2023
- Complete replacement of the WWTP’s Headworks and influent pump station at a cost of $15 million, proposed to be constructed in fiscal year 2027
- Reconstruct five pump stations and rehabilitate seven others at a cost of $9 million, proposed to be undertaken within the next 10 years
The Solid Waste division is facing financial pressures because of increased dumping costs at the Monterey Regional landfill—estimated around $1 million over the next five years—and the loss of revenues from recyclable materials.
In addition, the third phase in the closure of the city’s landfill will cost about $2.7 million, and various recently-approved state legislation will also balloon the division’s operating costs.
