7/25/2014 6:00:00 AM Council votes to increase water rates as of Aug. 1
Times file photo BLYTHE, Calif. — At Tuesday night’s Blythe City Council meeting, following a public hearing, the council voted 4-0 to increase water rates from $5.70 to $9 effective Aug. 1.
BLYTHE, Calif. - At Tuesday night's Blythe City Council meeting, following a public hearing, the council voted 4-0 to increase water rates from $5.70 to $9 effective Aug. 1.
Noting a 63 percent increase to the water rate, Blythe resident Kathy Linares asked the council to consider enacting the increase in increments to lessen the impact on residents.
"Why can't we have it split over a time period?" asked Linares. "Increase it by half the amount now and the other half later."
Blythe City Manager Frank Luckino explained that if the rates are not increased now, the $59,000 in reserves will soon be gone.
The background on the water rate hike dates back to 2003 when the city was approved for a $5,771,200 zero interest Safe Drinking Water SRF loan to pay for the construction of the water treatment plant. At that time, water rates increased to its current amount and the city began collecting the money from city water customers.
On Aug. 2, 2004, the city asked for and received an increase on the loan, raising the amount to $9,807,160. The city started making payments on the 25-year loan in 2008, while building up a reserve of approximately $970,000 by 2007. Rates were never adjusted to accommodate the new amount and the debt service payment amount of $392,286, paid annually, has now depleted the reserve to approximately $59,000.
The new rate is projected to add $5,000 annually to the reserves and cover the repayment amount 100 percent, yet the reserve is required to have $230,840 available in case of an emergency.
Councilman Joey DeConinck asked Luckino if the money in reserves had been used for "anything else." Luckino's answer was no with city attorney, Christian L. Bettenhausen, explaining that the money is part of an enterprise fund and therefore couldn't, by state law, be used for anything other than what it was designated.
"Enterprise funds are meant to pay for itself and it should not be using other money (general fund) to pay for its services," said Bettenhausen.
Vice Mayor Tim Wade asked why previous administration did not address the discrepancy.
"A cushion was created to the amount of $900,000 and since then it has been chipped away at but I can't speak to past administration decisions," said Luckino.
Luckino said that the council and administration was before his time and with Interim Assistant Finance Director Christa Elms' help, they were unable to locate a reason to why the oversight.
"We are already close to a fiscal emergency so we have to do this," said Mayor Mike Evans.
At the beginning of the hearing, local resident Bob Grady said he does not mind paying premium rates but he does not believe the city is getting premium service.
Also on the agenda, the council voted 3-1 to move forward with the Hobsonway Riviera Drive/I-10 ramp by giving California .27 acres of Blythe's property to be used as the off-ramp. Included in the vote was approval for the city manager to complete the necessary steps for an equal land swap between the city and property owners Mike Farrage and Bob Hull. The 4.78 acres of land swapped secures the right of way the state needs for the off-ramp. In addition, Farrage and Hull will pay half of the $15,000 needed for the documents to complete the process and the city will pay the other half ($7,500).
Evans, who was the "nay" vote, asked Public Works Director Armano Baldizzone if the off-ramp would benefit the city.
"From a technical stand point, the off-ramp is close to the station (Port of Entry) and I would relocate it," said Baldizzone. "But from a operational stand point, there are not enough warrants (accidents/incidents) at that site to support the move."
DeConinck said that he found the $3 million that CalTrans has committed to the project and if the deal does not happen now, Blythe will never see that type of money again.
"We haven't got a dollar from the state and now they give us $3 million," said DeConinck. "We need to do it because that's the problem with the state, they'll take it."
Estimated cost of the total project is $3.81 million. CalTrans dedicated $3 million of its State Highway Operation and Protection Program (SHOPP) money while the city will pay the balance from the State Transporation Program (STP) money set aside by the county and avoiding using the city's general fund. According to the staff report, even though the SHOPP money is designated for this project, the money may not be available after December, if the project is not under contract. The city has paid $474,000 for the designs of the off-ramp. The city's portion of the project budget is $533,000.
"We should ask the voters if they want an off-ramp," said Evans.
"This has been a contentious issue and I've been on the fence, but in a nutshell, because of the money we have paid out we have no choice," said Cusick. "It will open up Hobsonway. And we were told by C.R.I.T. that possibly, an off-ramp might entice them to come. I think we should push it."
"Couldn't we move it (the money) to another project like a stoplight on Vernon Avenue and South Broadway," asked Evans.
"Yes, but it would be a long process and the county would have to approve the project," said Patty Romo, Riverside County Transportation Department representative.
"We are too far upstream and I feel we are at a point of no return," said Wade. "I am only voting for it because we are already $474,000 into the project."
The city has until Aug. 7 to complete the right-of-way acquisition (land swap). By Aug. 12 the council and county needed to have entered into a cooperative agreement. The county will need to request from the CalTrans the federal STP money which will take up to six weeks for approval. The Riverside County Board of Supervisors has a deadline of Sept. 23 to approve the cooperative agreement and advertise for bids. The county is expected to award the construction contract by Dec. 16.
"I would rather see the money used on the city, like Defrain Blvd. where it was originally designated," said Evans. "And I think the citizens would like that more."
The city/county cooperative agreement is planned for approval Aug. 7.
The next regularly scheduled city council meeting is scheduled for Aug. 12 at 6 p.m. in the City Council Chambers, 235 N. Broadway.