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Sewer Costs Under Fire
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Like water rates, those for sewer services in Escalon have not been raised in more than 20 years.

And while the community has enjoyed a low rate for that time, they are about to jump, if a proposal under consideration by the Escalon City Council is approved.

And even as the council considers a move they say is necessary and long overdue, those attending a public workshop on the proposed new rate structures Monday night were not happy.

Specifically, industrial customers Escalon Premier Brands and Eckert Cold Storage – the only two identified industrial users in the city mentioned in the study – would see rates go up significantly beginning next year. Representatives of both firms were in attendance at the workshop but left with more unanswered questions regarding how the rates were determined and what past councils may or may not have authorized in terms of updates at the wastewater treatment plan.

Hansford Economic Consulting prepared the rate study and Catherine Hansford took the podium Monday night to present the report.

City Manager Tammy Alcantor said previous studies by the city to consider raising sewer rates never panned out, and they haven’t gone up since 1992.

In addition to having to make up an operating deficit in the wastewater system, the city was served with a Cease and Desist Order last December by the California Reginal Water Quality Control Board.

“The Case and Desist order reflects a lack of sufficient maintenance of the City’s wastewater system in the past,” Hansford wrote in her report. “Insufficient maintenance was the direct result of insufficient revenues in the wastewater enterprise fund.”

The rates hikes are designed to not only get the system to a point where it is self-sufficient, Alcantor added, but also to finance the needed upgrades and maintenance at the treatment plant.

Hansford said four steps were used to determine the rates, first establishing the wastewater customer base and user characteristics, second project the revenue requirement and allocate to collection and treatment. Third, allocate revenue requirement based on flow and strength and determine unit costs and finally, determine revenue requirement by customer type.

If eventually approved by the council, the new rate structure would go in effect Jan. 1, 2016 with the initial increase, followed by additional rate increases on July 1 for five consecutive years, 2016 through 2020.

Currently, residential customers pay a flat fee of $22.64 bi-monthly (every two months), the same rate that has been in effect since 1992. Under the proposed plan, that would increase to $48.86 in January, 2016, with additional increases each July through 2020, up to a bi-monthly fee of $69.96.

Industrial users have a base charge and a monthly debt service charge, in addition to variable charges based on what type of material they are sending to the treatment plant and other factors. The study shows Escalon Premier Brands with a monthly base charge now of $22,400.65 and a debt service charge of $4,215 per month. Under the first hike, in January, their costs would rise to $34,099.75 for their base charge monthly and the debt service would more than double, to $10,968.53.

Eckert Cold Storage, with a base charge now of $7,852.93 and a debt service charge of $647, would see their rates increase to $12,990.38 for the base charge and $2,605.53 for the monthly debt service charge. The debt service for both Eckert and Escalon Premier Brands would remain steady over the next five years, but the base charge would rise each July.

Alcantor said the meeting was for informational purposes, designed to draw comment from residents and industrial users, with that information taken back to the council. The majority of council members were in attendance and the issue is to come before the council at its Nov. 2 meeting for additional review and consideration.

With many lingering questions – especially from industrial users – Alcantor said she would work with them to try and get the answers they sought this week.

The rate hikes can be rejected if a certain majority of residents file protests against them; Alcantor said the rates proposed are the maximum the council could implement and they could be lower than projected.

If the council agrees to move the proposal forward, it would come up for a public hearing on Jan. 18, at which time residents will have another chance to comment for or against the plan.