Newport plans rate increase for wastewater service

Wastewater service could become more expensive for Newport Beach water customers early next year.

The City Council voted 4 to 3 on Tuesday night to support a plan that would raise wastewater rates over the next five years, the first increase in nearly a decade. Council members Scott Peotter, Marshall “Duffy” Duffield and Kevin Muldoon voted against the proposal.

For most residential customers, the increase would amount to about $2 a month starting in January, according to George Murdoch, the city’s utilities general manager.

City leaders are expected to take a final vote on the issue Jan. 12.

During the next several weeks, customers will receive a notice from the city alerting them to the potential rate increase. The community will have 45 days to respond by mail or email to the city clerk’s office at 100 Civic Center Drive.

If 50% of customers — roughly 13,000 people — are against the increase, the council cannot pass it.

Residential and commercial water users in Newport Beach are charged on their regular bills for removal and treatment of wastewater, which includes sewage and water from sinks and showers, known as “gray water.”

A typical single-family home pays about $8.35 per month for wastewater service. The proposal to increase the rate structure would mean that the same home would pay $10.32 per month in the first year, with additional increases of roughly $2 per month each year after that until 2020.

“It’s not a very big increase — no more than people pay as an increase on their phone bill or for gas or electric service,” Murdoch said.

Officials said they’re not sure how much money the increase would bring in over the five years. However, additional rate revenue is necessary for the city to improve its aging water system, Murdoch said.

In 2013, the city contracted with HF&H, an Irvine-based consulting firm, to study rates for wastewater and recycled water services. Based on the study, the City Council decided in June 2014 to halve the cost to ratepayers of recycled water.

However, the study indicated that the city needs to bulk up its fund for wastewater service if it wants to pay for system improvements that are expected to cost about $30 million over the next 30 years. HF&H projected that the city would have to dip into reserves to fund the projects, which by 2017 could wipe out the $900,000 the city has in wastewater reserves.

Drought-related conservation has been driving down water use — and bills — in Newport Beach, making it difficult to shore up the city’s wastewater enterprise fund, which finances water system work such as replacing aging pipelines and sewer stations.

“This has been an issue long before the drought, but the drought definitely didn’t make it any easier,” Murdoch said.

Since the last rate increase nine years ago, the city has outsourced various water services and reduced expenditures in the capital improvement program, but it wasn’t enough to stave off a rate increase forever, Murdoch said. The city’s Finance Committee recently looked at outsourcing more water-related services but decided it wouldn’t be cost-effective.