Council sets June 17 public hearing on proposed sewer rate increases following Willdan study

The Island City Council voted on April 15 to set a public hearing for June 17 on proposed sewer rate increases recommended by Willdan Financial Services after a five-year financial analysis.

Chris Fisher of Willdan told council the study found the sewer utility has not raised rates in more than 20 years, is not meeting debt-service-coverage requirements on a loan that carries about $145,000 in annual debt payments, and lacks reserves to fund planned capital projects. Fisher said the consultant's recommended multi-year schedule of rate increases is designed to restore adequate reserves, meet debt covenants and fund capital improvements.

Why it matters: the study’s recommended increases would cover operating costs, capital projects identified in the city's capital-improvement plan and debt-service coverage required by the city’s lending covenants; the public hearing triggers the Proposition 218 protest and notice process.

Key findings and next steps Fisher summarized methodology and projections, saying the city’s revenues under the current rate structure fall short of projected operating, maintenance and capital needs and that the proposed increases would bring revenues in line with expenditures across the five-year planning period. He told the council the proposed changes would move Ione's rates closer to peer-city averages while keeping the city below the overall comparison group average.

Fisher and staff outlined procedural next steps: if council confirms the schedule, the city must mail Proposition 218 notices at least 45 days before the hearing; the deadline to mail notices is May 1 to meet a June 17 hearing date. Fisher explained the Proposition 218 protest process and said written protests would be tabulated by the city clerk; if written protests exceed a majority (50% plus one) of affected ratepayers, the council cannot adopt the rates.

Council action Council authorized staff to proceed with the Proposition 218 process and to set the public hearing for June 17. The consultant and city staff will mail required notices to property owners and customers and will return to present the proposal and hear public testimony at the June hearing.

Ending note Fisher said the comparison group average was about $82.65 and that Ione's proposed rates would remain below that group average while addressing the utility's financial shortfalls. Council and staff emphasized that any adoption would be subject to the Proposition 218 protest results.