Petaluma residents will see their water rates rise this July in response to the Sonoma County Water Agency increasing the amount it charges cities and retailers by 5 percent. For the average Petaluma household, this could translate to an increase of roughly $0.70 in the winter months and $1.50 in the summer months.

The agency only needs to increase rates by 1.5 percent to fund its rising operating costs, but has opted to raise rates an additional 3.5 percent to collect funding for several large capital projects SCWA is facing in the near future, like mandatory habitat protections for the local salmon population and replacement of sections of its aging pipeline for seismic safety standards.

"We discussed it with our retailers, including the city of Petaluma, and explained that we could do a very small increase now and see rates spike in the future, or we could smooth out the increases annually," said Michael Thompson, SCWA's assistant general manager. "The cities said they would rather see smaller increases each year, so that's what we're doing."

By increasing rates each year incrementally, Petaluma has chosen an option that will avoid major double-digit rate jumps, Thompson said. Petaluma's wholesale water rate will go from $672 per acre-foot of water up to $705.

Because of a Petaluma City Council resolution passed in December of 2011, midyear rate increases by the water agency are automatically passed onto the ratepayers and take effect on July 1. But while the city will be seeing a 5 percent rate increase from SCWA, Petaluma Public Works Director Dan St. John said that the ratepayers will probably only experience a 2 to 3 percent increase on their monthly bill.

"We haven't done the calculations yet, but we're anticipating a fairly low rate increase for our customers," said St. John.

In Santa Rosa, the City Council voted to raise rates by 2.1 percent last week, which translates to about 71 cents per month in the winter and $1.49 per month in the summer for the average household. St. John said that Petaluma's rates would be very similar, though he did not know when the final calculations would be complete. He added that this midyear increase will be followed by an inflation and cost-of-living increase in January of 2014, which is calculated and set by national rate standards.

The additional revenue SCWA collects from the rate hikes will be used to fund several large-scale projects, most of them aimed at helping the area's struggling salmon population.

Thompson said that the majority of the funds, approximately $30 million, will most likely be used for a habitat restoration project along Dry Creek, meant to protect young salmon in the creek. Those salmon are currently having trouble surviving high-volume summer water releases from Lake Sonoma to the Russian River, which are done to maintain recreational water supply levels in the Russian River. Dry Creek is home to endangered coho salmon and threatened chinook salmon and steelhead that are having difficulty thriving with fast flow of water from the summer release.

The project, a requirement of the National Marine Fisheries Service, consists of restoring habitat along a six-mile stretch of Dry Creek that has been damaged during the high-volume releases. The first three miles of the project has already been funded through grants. The SCWA rate increases will be stored away and used to fund the second half of the project at a later date — provided that the first phase works the way it is supposed to.

After the water agency performs the first three-mile creek restoration, the National Marine Fisheries Service will assess it. If it has not adequately protected the area's salmon population, SCWA will instead be forced to build an additional pipeline to release water from Lake Sonoma to the Russian River to lessen the flow through Dry Creek. Building a second pipeline could cost as much as $140 million.

Meanwhile, a smaller portion of the funds collected from the rate hike will go to replacing sections of the water agency's 52-year-old pipeline that currently runs from the Russian River to Novato. The water agency is planning to set aside $3.2 million to replace sections of the pipeline in Santa Rosa for earthquake safety. Sections in Petaluma will also need to be seismically retrofitted, though no funding has been set aside for that project. St. John said that if Petaluma and other cities can reduce their amount of summertime peak water usage, it may extend the pipeline's estimated 50-year lifespan.

"Petaluma and other cities are going to begin looking at what they can do to increase water conservation and reuse," said St. John. "There are many opportunities out there, like (building water storage, facilities) that we could be looking at in the future."

Councilmember Mike Healy said that while he supports the agency's plans to fund later maintenance projects, he would like to see the city use more of its well water supply in order to reduce wear on the aging pipeline and save the city money. Two years ago, Healy proposed a measure to use 10 percent of the city's well water year-round, instead of just during extremely dry summer months. The motion failed, with dissenting councilmembers like Teresa Barrett saying that the city's groundwater supply should be for emergency use only. But Healy argues that when the city gets 10 percent of its water supply from wells, it does not significantly lessen the groundwater supply and pointed out that doing so is cheaper than purchasing water from SCWA.

Mayor David Glass said that he would like to see a balance struck between using well water to lessen wear-and-tear on the aging pipeline and saving groundwater for emergencies. "Water is extremely valuable to have in our reserves if we hit a drought," he pointed out. "But we have to keep in mind the (pipeline) equipment. There's a sweet spot that would be fiscally sound, without depleting our groundwater supply."

Healy said he intends to put the matter to the council again sometime this spring.

(Contact Janelle Wetzstein at janelle.wetzstein@arguscourier.com)