Sanitary district considers rate hike

NILAND — The Niland Sanitary District Board of Directors will meet tonight to discuss and possibly approve a plan to ask residents here to consider a proposed rate hike that would help the beleaguered district remain solvent and operational.

Tonight’s agenda item was prompted largely in part by the board’s decision in April to narrowly reject a similarly proposed rate hike that officials say is needed to obtain millions in grant funding for wastewater plant improvements.

Following the board’s 3-2 vote on April 13 to reject the previously proposed rate hike, discussions ensued among county, state and federal officials to determine possible options, said John Van den Bergh, a consultant with the Rural Communities Assistance Corporation who conducted the district’s rate study.

“We all talked and decided that we really can’t let the Niland Sanitary District go under,” Van den Bergh said. “It would be unfair to the community.”

If approved, tonight’s resolution will authorize the district to begin anew the Proposition 218 process that requires any new tax or assessment be placed before voters for possible approval.

The district had previously gone through a similar Prop 218 process for the proposed rate hike that was rejected in April. As part of that process, property owners and renters were given the opportunity to protest the proposed rate hike.

The potential rate hike being proposed tonight differs from the previous one, as a result of additional costs that would be passed on to ratepayers, Van den Bergh said.

Those additional costs stem from a settlement agreement the district entered into with the California Regional Water Quality Control Board that required the hiring of a wastewater plant consultant as well as a series of mandated training sessions for board members, he said.

The training sessions are to take place over the next two years at a total cost of $125,000 and provide board members with additional knowledge about the legal, management and financial aspects of their elected positions, Van den Bergh said.

The settlement’s increased expenses have resulted in the previously proposed $58 rate hike to increase to $69. The initially proposed $58 rate hike had also included a provision where it would have risen to $63 by July 1, 2019, while the revised sewer rate hike would remain constant, Van den Bergh said.

Currently, a residential unit pays a flat-rate of about $37 per sewer connection.

A recent assessment of sewer connections throughout the community also resulted in a change in the number of verified connections and the total amount of potential revenue coming from ratepayers.

The overall reduction in the number of verified sewer connections and potential revenue also prompted changes in the previously proposed $58 rate hike.

“The net result was that everyone else’s rate went up a little bit,” Van den Bergh said.

The district had been long accused of not maintaining accurate records of sewer connections and overcharging property owners for nonexistent connections.

The recent communitywide assessment is expected to put an end to such charges, Van den Bergh said, adding that the district still must reimburse for past overcharges.

“The district will have to deal with this, but going forward (assessments) will be correct,” he said.

Without an approved rate hike, the district continues to remain out of compliance with state water quality laws, officials said.

The absence of an approved rate hike also disqualifies the district from a previously approved county loan and a federal grant aimed at improving the wastewater plant’s infrastructure and bring it into compliance with state water quality laws.

The county Board of Supervisors had approved a $934,753 loan to the NSD on Jan. 24 to help eliminate pending financial liabilities associated with state water quality violations as well as fund half the cost of a facility upgrade design.

A pending $5.8 million grant from the U.S. Department of Agriculture also hangs in the balance in the absence of an approved rate hike, officials said.

Property owners and residents had rejected the previous rate hike on April 13, yet fell short of the simple majority needed to prevent it from being considered by the board for a formal vote, as outlined in the Prop 218 process.

Many community members in attendance that night complained of never having received their protest letter, which in turn skewed the outcome of the community vote, they claimed.

This time around, district officials have plans to not only send the protest letters to local addresses provided by the county Assessor’s Office – as required by law – but also to mail the letters to every P.O. Box in the town, Van den Bergh said.

“Some people may receive the letter twice, but we’re trying to reach as many people as possible,” he said.

Having to ask board members and residents to consider a revised sewer rate hike is not something board President Debbie Salas-Rico is looking forward to, yet it remains one of the district’s few viable options to help it address its current situation.

The revised proposed rate hike would provide just enough funding for the district to continue to operate, but fall short of providing enough revenue to help build its reserves, she said.