Dinuba’s water, sewer rates to rise

Council Member Kuldip Thusu looks at slides shown on TV as part of Public Works Manager George Avila's presentation.(Kenny Goodman)

Dinuba adopts detailed five-year plan for waster, sewer system improvements through utility rate increases

DINUBA – City water and sewer utility rates are set to increase Oct. 2, with subsequent increases coming every July 1 beginning in 2024 and continuing through 2027.

The Dinuba City Council approved the rate increases on Sept. 26 by a 4-0 vote — with Councilmember Benjamin Prado absent — after receiving no majority protest from utility customers. Rates will increase over the next five years to help the city maintain its financial reserves, keep up with inflation and fund capital improvement projects.

“We want to make sure that both our water and our sewer system remain dependable,” George Avila, interim public works director, said. “It’s something that the residential city can rely on, and then of course the other factor is that we want to make sure that our infrastructure doesn’t hinder us in terms of economic development.”

Rate increases

Water bills are calculated by a volumetric rate per 1,000 gallons plus a fixed monthly charge. For all customers, the fixed monthly charge will increase by $3, from $12.09 to $15.09.

Residential customers are billed based on incremental volumetric rates. Rates for water usage up to 9,000 gallons will decrease by a half cent, from $1.21 to $1.205, and rates for usage above 9,000 gallons will increase by five cents from $1.96 to $2.01.

Commercial and industrial volumetric rates have one uniform volumetric charge per 1,000 gallons regardless of water usage. Commercial rates will increase by nearly nine cents from $1.47 to $1.559 and industrial rates will see a significant decrease of 28 cents, from $1.56 to $1.28.

The city is also changing how it bills irrigation customers, who were previously charged either the residential or commercial rates. Irrigation use of up to 50,000 gallons will be billed $1.47 per 1,000 gallons and use of more than 50,000 gallons will be billed $3.06.

Sewer bills are calculated differently based on the type of customer. Residential customers pay a single monthly fixed charge regardless of usage, which is increasing by nearly $10 from $33.70 to $42.23.

Commercial sewer customers pay a fixed monthly charge plus a volumetric rate per 1,000 gallons of sewer discharge. The commercial fixed monthly charge will decrease significantly by nearly $20 from $37.32 to $17.97, but the volumetric rate will increase by just more than $2 from $3.73 to $5.85.

Industrial sewer customers generally pay an incremental volumetric rate that varies based on the strength of sewage discharge plus a sewer service charge per pound of discharge; however, the rates for biochemical oxygen discharge (BOD) per pound will become uniform with the rate adjustments. The industrial rate for all sewage flows will increase from $1.83 to $2.69, the uniform BOD rate will be 59 cents and the sewer service rate will increase from 35 cents to 46 cents.

Five-year plan

When the Dinuba City Council was first presented with the utility rate study prepared by Willdan Financial Services, council members opted to move forward with implementing a five-year plan for rate increases that would allow for phased improvements to water and sewer infrastructure.

After the initial rate adjustments take effect on Oct. 2, the following increases that begin in 2024 and carry on throughout the next few years will be minimal.

Each subsequent rate increase will take place at the beginning of the fiscal year, which is always on July 1. Through 2027, most water and sewer fixed monthly rates will increase by less than $1, with the exception of the residential water fixed monthly rate, which will increase by $1.05 in 2024.

Volumetric rates over the next five years will also see small changes after the first increase. For example, the residential water rate for usage of up to 9,000 gallons will increase by about 25 cents, from the $1.205 rate effective Oct. 2 to $1.45 effective July 1, 2027.

This five-year plan allows the city to be on top of its water and sewer system management. Avila said Dinuba hopes to be economically competitive with other cities in the area and to do that, the city needs to have the structural capacity to bring more businesses — and with that, more job opportunities — into town.

“We’re trying to be a little bit more proactive in addressing issues before they occur, and then also creating the improvements or installing the improvements we need,” Avila said.

System stability

A driving force behind the rate increase was the rising cost of providing services, Avila said. As inflation continues to impact cities and residents, Dinuba needed to be able to keep up with its operating costs.

“The last time we did an adjustment to our rates was four or five years ago, and because of that we’ve fallen behind,” Avila said. “Over the course of those four or five years, just the Consumer Price Index has increased by almost 15%. I think you would be hard pressed to find anyone who can deny that.”

According to a city staff report, water and sewer funds are projected to operate in a $100,000 annual deficit without any rate increase, and so these new adjustments will help the city avoid that while also improving its systems overall.

Through Proposition 218, cities looking to increase utility rates must go through multiple steps that involve notifying utility customers of proposed increases, providing a 45-day notice before a public hearing on the increases and recording customer protest to the increases. If a majority of utility customers submit objections to a proposed increase, cities cannot go through with it.

Avila said that the city would have needed to receive around 4,000 protests in order for the proposed increase to fail; only one written protest was submitted, and no one at the council meeting on Sept. 26 spoke in objection to the increase. Out of four people in the council audience, one resident spoke on the matter to voice support for the increase.

Another reason for the increase is so the city can bolster its cash reserves that safeguard water and sewer system operations in the event of an emergency. The city’s current policy is to have 60 days of operating reserves on hand, but the city has not been meeting that standard, Avila said.

With the new rates, the city is changing its policy to have 90 days of cash reserves, which they will reach by 2027 and 2028, Avila said.

“From what we hear in the industry, (60 days of reserves) isn’t common … so we just bumped it up to 90 days,” Avila said. “That’s still not what most people do, most people do a little bit more than that, but we think that just to get us in a little better position, 90 days is a good mark to attempt to make.”

Infrastructure upgrades

The implemented rate increases will allow the city to work on capital improvement projects for both the water and sewer systems and will phase in four new staff members over the first few years of the five-year plan.

Avila said the city will add a total of three new water utility workers, one per year, to its staff and will hire a wastewater superintendent. He said the city has not had a full time wastewater superintendent since the end of 2017.

“We currently have four (employees) in both water and sewer collection, which when compared to other cities our size is nowhere near where we should be,” Avila said.

A few of the capital improvement projects will be paid for with cash, but the rest will require the city to incur debt. Avila said his department would begin work on finding financing for these projects as soon as the rate increases were approved.

Needed upgrades for the water system will cost $3.3 million over the next five years and sewer system upgrades will cost the city $11.3 million, Avila said. Upgrades and maintenance for the water system include replacing a steel pipe, preparing a water master plan and repairing multiple water mains.

For the sewer system, the city will be undergoing a rehab program for its sanitary sewer lift station and conducting multiple improvements on sewer mains.

“As infrastructure over the years gets older, it starts requiring more repairs … and so we want to take a more proactive approach as much as possible within the limits and restrictions of our budget,” Avila said. “New projects, expansions, things of that sort we want to be able to fund, just so we can protect the city’s investments.”

Start typing and press Enter to search