Government & Politics Oceanside projects rising sewer rates

By Ray Huard.April 8, 2013 in the U~T San Diego

Oceanside sewer rates must rise 4 percent a year for the next four years starting
in January 2014 to keep pace with needed repairs and maintenance, according
to city officials.

The increases also are needed to keep enough money in reserves to cover
emergencies, Water Utilities Director Cari Dale said.

The new round of increases follows a 5 percent rate increase that took effect
in January and annual increases that have been as high as 29.5 percent since
the 2008-09 fiscal year, when Oceanside was put on a credit watch by a national
bond rating agency that said the city was in danger of not having enough money
on hand to maintain the sewer system and make annual payments on
outstanding sewer bonds.

As of January, the monthly sewer bill for a typical Oceanside single-family homeowner
was $56.76, Dale said.

If sewer rates rise 4 percent a year through 2017, the typical month bill would climb
to $66.40 in four years.

City officials outlined the need for ongoing rate increases in documents prepared in
conjunction with plans to issue up to $18 million in bonds to refinance outstanding
debt for past sewer projects and raise $1 million to improve operating systems
at city sewage treatment plants.

Critic Nadine Scott said that by showing sewer rates increasing as part of the bond
documents, the city is making a commitment to raising rates before the public has
a say on the matter.

“They’re trying an end run around the public,” Scott said.

Dale and Lund said the bond documents are projections and don’t bind the city
to rate increases.

“It’s not a requirement that we have these annual 4 percent increases,” Lund said.
“It’s fiscally sound to do it.”

Any future increases would have to be approved by the City Council at public
hearings, Lund said.

Because of lower interest rates, by refinancing the outstanding bonds the city
expects to save at least $260,000 to $360,000 a year through 2028 in what it
pays to pay off the bonds, city Treasury Manager Michele Lund said.

The savings could be even greater if the city succeeds in persuading bond rating
agency Standard & Poor’s to upgrade the city’s credit rating, Lund said. She said
she will meet with officials of the rating agency later this month.

“The sewer fund is much better off than we were in 2008. One of the reasons it
is in better shape is the City Council has raised rates,” Lund said.

Rates were raised 20.3 percent in 2008, 10.4 percent in 2009, 29.5 percent in
2010, 9 percent in 2011 and 9 percent in 2012, Dale said.

Prior to 2008, the city had put off raising rates so long that the sewer fund was
operating in the red and by the end of the 2009-10 fiscal year had no money in
the bank to cover emergencies, Dale said.

“We have to continue investing in the infrastructure and we’ve never set aside
enough to do that,” Dale said.

Under a new policy adopted in 2010, the city has accumulated a reserve sewer
fund of $4.5 million and set that as a minimum, Dale sai