(Part 1 of this article, published in Friday’s paper, focused on the reasons for Benicia’s water and sewer rate increases. Today’s article aims to explore solutions.)

So what can be done about the cost of water and wastewater?  I have heard many suggestions as to the causes of the rate increases and how to fix them.
Use less water.  If you use less water, you will save on your bills, including the wastewater portion that depends on your water use.  However, if everyone uses less water (as is happening: Benicia water use was down almost 43 percent in January 2018 compared to January 2013), you will still save but not as much: typically, 75 percent to 80 percent of the costs are fixed and they have to be covered whether we all use a lot of water or very little.
An example of our fixed costs is our water purchased from the State Water Project: all SWP contractors have a “take or pay contract”: you pay for all the water whether you take it or not.  When the SWP was started, DWR claimed they would supply 100% of the contract amount every year except in an extended drought, when they would supply 75 percent.  In reality, the SWP can only supply about 60 percent of the contract amount on average, and in the last drought, they were down to 5 percent, a far cry from the 100 percent/75 percent promised.  Whether we get 5 percent or 100 percent, we have to pay for 100 percent!
Delay capital projects.  That can be done, if you want to repeat the same mistakes of the past.  Delaying capital projects is a good way to give the illusion of paying less, but a bigger bill comes due eventually.  Rate funded capital costs are about 10 percent of the water costs, so you won’t save much there.  Rate funded capital is 21 percent of wastewater costs, or about $14 per month.
Delaying projects means needed capital improvements will be delayed, putting the system and water quality at greater risk.  But financially it is even worse: not only will you not save anything in the long run, it will cost you more as capital costs increase with time.  Eventually another big rate increase will be needed to make up for the lost revenue and the increased capital costs, and the cycle will be repeated.
Delaying capital projects also put health and safety at risk: one of the big capital projects coming up is the MIEX project, an innovative and necessary project that will improve water quality, reduce cancer risks from disinfection byproducts and ensure that Benicia continues to meet water quality standards.  Benicia’s water comes from a dead-end slough in the Delta surrounded by ranch land, and as a result that water has very high dissolved organic carbon levels.  MIEX will remove more of that DOC which will greatly improve our water quality and help save on some chemical costs.  That is a project I would like to see completed sooner, and not delayed.
Pension costs.  A number of people have claimed the rate increases are entirely or largely due to rising pension costs.  Are they?  A look at the rate study document shows that total pension (PERS) costs are less than 4 percent of the water and wastewater budgets.  You won’t save much there, even if you were able to eliminate those costs entirely.
Simply reduce rates.  Unfortunately, the rates are set to match the cost of running the systems.  If you reduce rates, you have to reduce costs and you have to find costs to reduce.
If you go through the budgets for the water and wastewater systems, you won’t find any single big item to eliminate that will reduce rates significantly and still allow safe, high quality water to be delivered, and wastewater to be properly collected, treated and discharged.  To significantly reduce costs, you have to work hard to reduce a lot of lower cost items, as discussed below.
So what can be done?  A number of things can help.  Here are a few:
Move the fixed cost for wastewater to the property tax bill.  Vallejo recently did this.  The $97 bimonthly bill would go to the property tax bill (increasing it by about $600) but the big combined water and wastewater bills would come down.
Allow high bills to be paid in 2 monthly installments.  EBMUD and other agencies allow this and if combined with auto-pay, this can be easily implemented.  High water users with huge summer bills would be able to spread the cost over two payments.
Delay the next rate increase in July until next winter, when water use is low and people have time to adjust their use and budgets.
   Tiered rates.  Under Prop 218 these are hard to do, and easily attacked in court, but not impossible.  It is much easier for a big system with billion-dollar capital projects needed for peak demands (EBMUD for example); small systems have a harder time doing this because many pipes are sized in a small system for fire flow requirements, so there are fewer extra costs to assign to high users.  Tiered rates would mean high users pay even more, low users pay less and those in the middle (which is most of us) pay about the same.
   Review all costs.  If you want to reduce rates, this is where to start.  The city is embarking on a program of Priority Budgeting.  That is great, but if you do the online survey, you will find a list of choices, but not all the possible choices.  Budgeting must be more than trading off the police budget for the quality-of-the-environment budget.
Reducing costs can avoid reducing services, layoffs and tradeoffs.  For example, reducing future increases in pensions by reducing the pensions or requiring employees to pick up a larger share can avoid layoffs and reduced services.  Although PERS costs are a relatively small part of the water and wastewater budgets, they are a significant part in the future shortfalls in the overall city budget.
Consequently, a close look at all water and wastewater costs is a reasonable way to start: before we have to choose priorities in city services, step one should be zero-based budgeting: put everything on the table and find ways to reduce costs; then do the priority based budgeting.
Being transparent about all costs (including water and wastewater reimbursements to the General Fund for general management, financial and human resources services, for example) is mandatory.     Learning from other agencies how they keep costs down would be extremely useful, especially for our wastewater system.  Transparency is mandatory: you need to know and understand all costs to safely reduce some of them.
There are no easy solutions, but that does not mean there are no solutions.  We will have a better future if we deal with these problems directly, rationally and civilly.

Dr. Greg Gartrell has lived in Benicia since 1988. He retired in 2013 from his position as a water manager, and has over 40 years experience in water resources. He earned his doctorate in environmental engineering science at the California Institute of Technology.

Sharing is caring!