A proposal by the Santa Clara Valley Water District to raise
wholesale water rates across the county by 25 percent is raising
some eyebrows locally. Already in San Martin a member of a district
flood control committee has resigned from his group over the issue.
Morgan Hill raised its water rates 2 percent Jan. 1 and added a
separate 5 percent surcharge in April to cover city shortfall over
perchlorate costs.
A proposal by the Santa Clara Valley Water District to raise wholesale water rates across the county by 25 percent is raising some eyebrows locally.
Already in San Martin a member of a district flood control committee has resigned from his group over the issue.
Morgan Hill raised its water rates 2 percent Jan. 1 and added a separate 5 percent surcharge in April to cover city shortfall over perchlorate costs.
Similar increases are scheduled for the next three years though, if the city should recover any perchlorate-related costs from Olin Corp., the surcharge will be refunded to water customers.
Discussions are under way with the water district over the rate hike and any increase will definitely affect Morgan Hill’s cash flow, said City Manager Ed Tewes.
“We will have to recover the costs somehow,” Tewes said.
Normally the finance director reports to the Council every September on the condition of the water fund and the need for rate hikes. Tewes said it had not yet been determined whether Council would need to consider raising water rates again before Jan. 1, 2005.
In Gilroy, city officials are preparing to absorb a large portion of the rate hike and go in the hole by $390,000 next fiscal year.
The water district board of directors will vote on the rate hikes June 15. And if history serves as any indication, the rate hikes will be approved.
“We’ve had support on this from the board,” water district spokesman Mike DiMarco said. “The board knows the economic realities we’re dealing with and I haven’t heard any board member saying their adamantly against the rate increases.”
The economic reality, according to DiMarco, is that the water district’s cost to import water has gone up. Also, as new mandates get handed down by federal and state officials, the water district often must add personnel to carry out the work associated with meeting protocol.
However, for Bob Cerruti, the committee member who recently resigned, salaries for water district employees are something that could be trimmed in next year’s budget. Instead, the salaries have been increasing by roughly 3 percent each of the last few years.
“They should not be giving salary increases across the board and then complain that they have to raise rates because they’re not getting enough funding,” Cerruti said.
Cerruti complains there is not enough oversight coming from the water district’s board of directors.
