Council seeks one-cent hike measure for Nov. 4 ballot

Benicia City Council took steps Tuesday that moves the city closer to a one-cent sales tax increase as well as a drought surcharge that would begin at $10 a year for those who have cut back on water use, but could be significantly more for those who fail to conserve.

Voters would decide Nov. 4 whether to increase the sales tax, and a consultant’s study has indicated that most residents would rather approve the levy rather than lose city services, the Council heard.

Catherine Lew, president of the Lew Edwards Group, and her company’s partner, Fairbank, Maslin, Maullin, Met and Associates, both of Oakland, represented Tuesday by Vice President Shakiri Byerly, conducted a sample of 400 Benicians who would be eligible to vote on the matter.

The response was “a wonderful affirmation of the city,” she told the Council.

While some local governments struggle for citizen approval, she said, “Benicia residents are overwhelmingly satisfied with the quality of life in the city and with the performance of city government, in percentages other communities would envy,” she said.

The poll indicated that as many as two thirds of the voters would support the increased tax before they would be willing to give up city services they value, and they prefer those services come from Benicia, rather than get farmed out to Solano County or another city.

Two of every three residents said they see at least some need for additional funding — 16 percent called it a great need. Representatives of every demographic examined, including classification by gender, age, political persuasion and area of residence, indicated they would endorse the tax.

A simple majority would be required to pass the tax increase, and the study indicated residents across the board would let the ballot measure succeed.

“We asked the question four times, to get our finger on the pulse,” Lew said.

“This is a tried and true scientific study,” City Manager Brad Kilger said. “It’s scientifically valid.”

Bonnie Silveria, a longtime resident who has been active in community organizations, including the city, told the Council she was glad it was considering the increase. She attends many Council meetings, and has watched the city struggle to recover from the recession.

“I would think, ‘Why don’t they increase the sales tax?’” she said. At one time, Benicia residents had nothing to brag about, and often claimed to be from Vallejo. Two decades ago, quality of life improved “on the back of development,” she said.

When the city chose to remain small, it lost large development as an income source, and Silveria said she didn’t want the city to end up in bankruptcy because it failed to act.

She reminded the Council that Benicia’s sales tax, at 7.675 percent, is the lowest in Solano County as well as below taxes in Contra Costa County. “Even Crockett has a higher tax,” she said.

The one percent would raise the tax rate to 8.675.

If the Council is to get the measure on the ballot, it would need to follow Tuesday’s unanimous approval vote to go forward with another airing of the proposal.

That will come at 7 p.m. Monday at a special Council meeting at City Hall, 250 East L St.

By unanimous vote, the Council also agreed to proceed with adding a drought-related surcharge to its water rates.

Rather than see the measure on this year’s ballot, Benicia property owners will be sent notices advising them they’ll need to file objections with the city if the surcharge is to be defeated.

In addition, the Council will give them a chance to speak during a public hearing Sept. 16.

A lack of response would be considered tacit approval under provisions of Prop. 218, which governs certain parcel-related revenue matters. If the proposal is approved, the surcharge would be effective Oct. 15 and reflected in the November water bills.

Residents have begun to cut back on water use, Interim Public Works Director Steve Salomon and Interim Finance Director Brenda Olwin said in their mutual report.

“The community is responding,” Salomon said. In comparison to statewide numbers that indicate Californians aren’t hearing Governor Jerry Brown’s recommendation to reduce use by 20 percent, Benicians are getting closer to that goal.

An earlier report said Benicians were halfway to the 20 percent reduction goal. Tuesday night, the Council heard residents and companies had cut back 12 percent compared to the baseline year of 2012, and 25 percent compared to last year’s numbers.

“The governor is not getting this response in the state,” Salomon said. “What we’ve been able to accomplish is astounding.”

But dealing with the drought is costly, he said. Water purchase and delivery has been estimated at $980,900, conservation costs at $134,000; capital conservation projects at $463,000 and revenue losses at $999,117, although Salomon said that last number “is the biggest unknown.”

Olwin reminded the Council that it authorized spending up to $900,000, and said negotiations had secured a price of $200 for each acre-feet of water.

“That’s a better rate than in the Central Valley, where water is going for $1,300 an acre foot.

Olwin said developing the amount to charge water customers was a challenging calculation, since it is difficult to compare Benicia with its neighbors. She said the staff proposal “is fair,” explaining that all elements of the community need to share in the costs.

Unlike most customers, Valero Benicia Refinery gets most of its water from Lake Herman, because its manufacturing doesn’t need treated water, although Public Affairs Manager Sue Fisher Jones said the refinery also uses some treated water.

Ordinarily, it would be encouraged to cut back at the same level as other companies, but it needs water to refine crude oil into gasoline and other products.

Fisher Jones said the refinery has a history of conservation, having already cut back its water consumption by 15 percent since it bought the plant from Exxon. Its project to add improved technology to existing boilers will save additional water before the end of the year.

“We are part of the community that wants to help,” she said.

The rest of the city’s water customers are divided into tiers, three for residential customers and two for non-residential users.

Residential customers use 74 percent of the city’s treated water, and the higher the tier, the more the individual customer uses.

Of these, 43 percent are in the lower-user tier, 1. Another 28 percent use enough water to put them into Tier 2, and just 3 percent are in the third tier. Among non-residential users, 8 percent are in Tier 1, and 18 percent are in Tier 2.

The proposed drought surcharges, which would keep the city’s water fund from dropping too low, would tack on 66 cents for every unit, or 748 gallons, of water used by Tier 1 residential customers, who use eight or fewer units.

Tier 2 residential customers, those who use eight to 30 units, would pay $1.07 additional for each unit of water consumed. Tier 3 residents, those who use 30 or more units, would pay $1.30 additional for each unit of water.

Nonresident Tier 1 customers, who use up to 30 units, would see an additional 67-cent increase for each unit of water. Tier 2 customers, who use even more, would have a 92 cent per unit increase.

But those rates are modified for those who keep cutting back their water use.

For instance, a family living in home that uses 12 units a month would pay an additional $10 a year if they manage to cut back their use 20 percent compared to 2012 bills. If they fail to cut back, their annual water bill would increase by $115.

Low income older residents use an average of nine units a month, and those who can cut back their water use by 20 percent also would pay an additional $10 a year for the surcharge. Those who don’t cut back would see their annual water bill increase by $77.

Those numbers frustrated some Council members, who worried that residents would be upset that their bills would rise even though they had been conserving, or find the numbers confusing.

Alex Handlers, principal with Bartle Wells Associates, Berkeley, supplied other numbers. For instance, water-saving Tier 1 customers would be surcharged nine cents for every 100 gallons they use; those in Tier 2, 14 cents every 100 gallons, and Tier 3 customers, 18 cents per 100 gallons.

Tier 1 non-residential customers who save also would pay an additional nine cents per 100 gallons; Tier 2 would pay 12 cents each 100 gallons.

“I’m still concerned with the message,” Councilmember Mark Hughes said. He said the way the Council and its consultants were discussing the matter, it sounded like those who conserve were being penalized because the city has lost revenue.

Instead, he suggested customers hear, “Thank you for your efforts, but the drought continues.” He said residents need to know that if they hadn’t been reducing water consumption, the surcharge would be worse.

Patterson offered her own version of the verbiage, also thanking consumers for their conservation efforts, but explaining the city has drought-related costs, including the water purchase. Those who continue to save on water would pay $10 a year more; those who fail to cut back would be charged more, she said.

If the surcharge goes into effect, it would give the city water operations and reserves $800,000 and capital funds of $1,214,365, which with $2,033,160 in restricted water connection money, would give the total water reserves $4,047,525 by June 30, 2015.

Without the surcharge, the total water reserves would be $2,547,160, nothing in water operations and reserves and only $514,000 for capital funds.

The surcharge would be reviewed quarterly. Kilger said the surcharge would end when drought costs are recovered or until the drought and its related expenses are done.

Vice Mayor Tom Campbell said he had worried the Council was “going to the well” too often by seeking additional money from property owners.

“But the more I look at it, it makes enough sense,” he said.