Petaluma council puts sewer rate rollback on the ballot

<p>After being told that an initiative to roll back its sewer rates to 2006 levels would lead the city toward mountains of red ink, a clearly unhappy Petaluma City Council voted unanimously Tuesday to put the initiative on next year’s ballot.</p><p>Under the law, their choices were limited: They could either approve an ordinance approving the rate rollback that the initiative demands — or put it to a citywide vote.</p><p>“I’m viewing this as a colossal waste of time,” Councilman Mike Harris said. Then he brought the 1-½ hour meeting to a close by making a motion to put the initiative on the November 2010 ballot.</p><p>Angered by rate hikes the council approved in 2007, Petalumans for Fair Utility Rates — a citizens group whose leaders include a former councilman — gathered enough signatures to force Tuesday’s council vote.</p><p>Initiative backers said the new rates were too high for senior citizens, renters and small businesses. They also contend that new development should shoulder more of the wastewater treatment burden, and that the city was using wastewater payments to offset general fund expenses.</p><p>“The city of Petaluma is financially abusing its ratepayers with rate increases of 20 percent a year,” said Bryant Moynihan, the group’s coordinator and a councilmember from 2001 to 2004.</p><p>City voters will be asked to answer a yes or no question: “Shall an ordinance be adopted to reduce city of Petaluma wastewater sewer rates to rates in effect on Jan. 1, 2006?”</p><p>If the rollback were to pass, the average monthly sewer bill for a Petaluma household would fall to an estimated $44 a month, down from $63 a month, city staff have estimated.</p><p>But city staff warned Tuesday that would force the city’s wastewater utility budget tens of millions of dollars into the red. City staff said this would cause the city to default on millions of dollars in loans that it borrowed from the state and private banks to build a new wastewater treatment plant, and reduce its ability to borrow money in the future.</p><p>“As soon as you roll back the rates you would be in default of your obligations,” said Robert Reed, a Sacramento-based financial analyst who contributed to a staff report critical of the initiative. </p><p>The 2007 rate increase, which followed an extensive public outreach campaign, was approved in order to pay for the city’s Ellis Creek wastewater treatment facility, decommission its old treatment plant, and fund a variety of other vital wastewater-related capital improvement projects, said Mike Ban, director of water resources and conservation.</p><p>He said actual sewer rates have increased by closer to 13 percent annually since the new rate plan was adopted.</p><p>The average monthly sewer bill in Petaluma is now midway between the highest local rate, of $80 a month in Cotati, and the lowest, of just under $30 a month in Cloverdale, the city staff report said.</p><p>The initiative is a watered down version of Measure K, which voters rejected last November. That would have required a return to 2006 rates for sewer and water services. That measure would also have limited future rate increases; this initiative doesn’t address future rates and affects only sewer rates.</p><p>You can reach Staff Writer Jeremy Hay at 521-5212 or jeremy.hay@pressdemocrat.com</p>