Newport Beach sewer fee may rise

The drought is driving down water use in Newport Beach.

But a consequence of reduced use is a decline in revenue that would help fund necessary improvements to the municipal water system, such as replacing aging pipelines and sewer stations.

Ratep ayers may be asked to help close the gap.

City staff presented a proposal to nearly double wastewater rates for customers over the next five years during a study session last week. If approved, it would be the first rate increase in nearly a decade.

Homes and businesses that use water in Newport Beach are charged in their regular bills for wastewater removal and treatment, which includes sewage and water from sinks and showers, known as “gray water.” Newport Beach has been identified as one of the heaviest per-capita water using cities in the state.

Because customers are using less water to comply with standards set by the State Water Resources Control Board, which recently mandated that Newport reduce use by 28%, they are also using less waste water.

Reduced use means lower bills for ratepayers but a decline in revenue for the city. And those declines are expected to affect the city’s wastewater enterprise fund, which finances various improvements to the city’s water system, over the next several years.

In 2013, the city contracted with HF&H, an Irvine consulting firm, to study wastewater and recycled water rates. Based on the firm’s findings, the City Council decided in June 2014 to halve the cost of recycled water to ratepayers.

However, the study indicated that the city needs to bulk up its wastewater fund if it wants to pay for necessary improvements to an aging system.

The projects are expected to cost roughly $30 million over the next 30 years.

The city is contributing half a million dollars each year to the improvements, said George Murdoch, the city’s utilities general manager.

HF&H projected that the city will have to dip into reserve money to fund the projects, which are expected to deplete $900,000 that the city has in wastewater reserves by 2017.

“You can see where we’re a little bit short,” Murdoch said. “We’ve had an aggressive program, butwe need to step it up a bit.”

If the council eventually approves the rate hike, it would be the first increase seen by ratepayers in nine years, he said.

A typical single-family home pays about $9.75 a month for wastewater. The proposal to increase the rate structure would mean that the same home would pay $13.79 a month by the first year, $16.27 by the third year and $18.04 by the fifth.

Wastewater rates for homes and businesses are composed of a fixed fee, a sewer charge and two additional surcharges of $2 a month for each additional house on the property and $10 a month for customers with larger water meters.

The proposal would eliminate the surcharges and move the cost to a monthly fixed price for sewer service based on the size of the water connection and sewer use charge, which is a monthly fee for all customers based onwater use.

Councilmen Scott Peotter and Kevin Muldoon asked city staff to look into the possibility of cutting costs by outsourcing portions of the city’s waste water service. Thirteen employees currently manage the city’s wastewater.