Staff is proposing a rate increase for users within the City's Domestic Water Service Area for the first time in over 4 years. Staff is proposing to increase quantity rates, readiness to serve charge and the private fire protection service charge by 4%. The specific dollar increase to each user is variable depending on the size of water meter installed at a specific property and actual water usage. The attached table (Exhibit A) provides more details, but this rate increase would represent an average monthly water bill increase from $41.98 to $43.56. If approved, the City’s water rates will continue to be the lowest in the metropolitan area.
Chapter 14.04 of the Bakersfield Municipal Code establishes the process by which the City establishes the fees and rates for the Domestic Water Service Area. Based on several factors which attribute to increased costs, including electricity, removal of the groundwater contaminant 123-TCP, system repair and maintenance, and additional capital improvement projects, it has been determined that this rate increase for Fiscal Year 2021-22 is necessary to help meet these costs.
California state law (Proposition 218) requires that fees adopted by the City for services rendered do not exceed the reasonable estimated cost for providing the services. Staff has determined that the proposed rates do not exceed the cost of services. Proposition 218 also requires a public hearing in which the public may support or protest the rate increase.
In accordance with California Proposition 218 (Prop 218), notices were mailed to approximately 46,475 users notifying them of the proposed rate increases. Pursuant to Prop 218, if written protests against the proposed fee are presented by a majority of the customers and/or property owners that are receiving water service from the City, the City shall not change the annual proposed fee. As of June 16, 2021, the Water Resources Department and/or City Clerk have received several protesting or commenting on the fee increase.
Proposition 218 also requires notices of public hearing to be mailed to all customers 45 days prior to a public hearing date. The City’s intent was to hold one public hearing date on June 2, 2021, which would require all notices to be mailed prior to April 18, 2021. Under the terms of the operation and maintenance agreement between the City and California Water Service Company (Cal Water), rate change notices and customer billing for the City’s Domestic Water Service Area is administered by Cal Water.
Cal Water mailed notices to each of the City's 46,475 Domestic Water Service Area customers and/or property owners that receive City water service; however a number of notices were mailed after April 18, 2021 and therefore not within 45 days prior to the June 2nd public hearing date. Due to the timing in sending some of the notices, the City Council opened the public hearing on June 2, 2021 and took all public testimony; no speakers provided testimony in opposition to the proposed increase. The hearing remains open and was continued to the June 16, 2021 meeting. This public hearing item is presented to City Council this evening to allow for additional public testimony.
Staff recommends City Council take all additional public testimony, close the public hearing and take action to adopt the proposed rate increase.