The cost of cleaning perchlorate from the city’s water supply is
the biggest cause of an upcoming water rate increase.
Morgan Hill – The cost of cleaning perchlorate from the city’s water supply is the biggest cause of an upcoming water rate increase.
On Jan. 1, all city water bills will be assessed a 15 percent perchlorate surcharge, up from the current 10 percent. It’s the third time the city has raised rates due to perchlorate problems.
“We think Olin should be paying for the cleanup we’re doing and not our citizens,” City Manager Ed Tewes said, referring to the company that contaminated South County’s groundwater with its now-closed Railroad Avenue road-flare factory.
The city has plans to raise the surcharge another 5 percent in 2007, but finance manager Jack Dilles said that may prove unnecessary.
Residents began paying a 5 percent surcharge in April 2004. It was bumped to 10 percent in January 2005.
“What happened is that we started incurring a lot of perchlorate costs,” Dilles said. “We’re still under water in terms of cost recovery, but we’re about to catch up. We didn’t want to hit the public all at once to pay for that.”
Rates will go up a further 2 percent to cover operational and capital costs and to fund the city’s water-related reserve fund. It’s the fourth of five scheduled 2 percent increases that began in April 2003.
The rate increases have been much less than those in Gilroy, where rates went up 10 percent in 2003, 15 percent in 2004, and 8 percent this year.
Gilroy residents pay about $59 for 25,000 gallons of water. Morgan Hill residents pay about $43 plus the perchlorate surcharge.
“We’ve been much more definitive about what our needs are the last few years,” Dilles said.
Water Bill Changes
Changes to average water bills with a
2 percent service increase and 5 percent
perchlorate charge
Old New
Apartment $12.39 $13.21
House $36.83 $39.27
Recent Rate Increases
April 2003 2 percent
January 2004 2 percent
April 2004 5 percent perch. charge
January 2005 2 percent
January 2005 5 percent perch. charge
