Council Approves Water and Sewer Rate Hikes

Milpitas water and sewer rates are going up over the next four years for city residents and businesses. To pay for rising costs of water and local infrastructure improvements, the Milpitas City Council Tuesday night approved a new rate structure to be phased in over four years.

Part of the costs passed on to Milpitas come from the San Francisco Public Utilities Commission for $4.6 billion on . Milpitas' share for the rebuilding the is $2.2 billion. In addition, the Santa Clara Valley Water District will spend $800 million on water supply capital improvements. 

City Engineer Greg Armendariz opened the staff report and turned over the rate matters to Senior Utility Engineer Kathleen Phelan. She said the council was being asked “to adopt 'not-to-exceed' rates for a four-year period. Actual rates are to be set annually plus any additional pass-thru costs.”

Water rates, priced at two tiers, would be increased to four tiers to encourage conservation. Single-family rates were set higher, in comparison with multifamily unit rates, based on San Jose's average household figures.

The new rates will apply to 17,143 parcels of property. According to state law, at least 8,572 written protests from owners are needed to block council approval. By deadline, only 523 written protests were received, according to City Clerk Mary Lavelle. City Attorney Mike Ogaz said there were not enough protests. 

Councilman Armando Gomez said he received an email expressing the concerns of a lot owner over the cost of water-rate tiers for required landscaping. 

Mayor Jose Esteves asked if the actual cost is adjusted annually. Phelan said, “yes, and rates could be lowered too.”

Resident Robert Marini asked, “Why are Milpitas sewer rates higher than any others? Proposition 218 costs shall not exceed proportional costs. You're violating Proposition 218 on the public notice. What is the basis for setting fees?”

He said he felt senior citizens were overcharged. “If residents paid their sewer charges based on hundred-cubic-feet (HCF) water usage, like businesses, then it would be fair.”

Ray Nario said, “I'm looking at a large amount of increase with no end in sight. Can rates be lowered if we pay off these improvements?”

Phelan responded, “We don't have to pay more after 2015, but we would continue for 30 years to pay-as-you-go at these double rates.”

Former mayoral candidate Rob Means added, “We're talking about a water upgrade of $4.6 billion. That's less than the BART extension. We're getting a doggone good deal! Tier 2 is 33 percent more. Tier 3 is 35 percent more. Tier 4 is 13 percent more—should be 35 percent. Senior citizens, we can help you out with conservation.”

Gary Long, a resident since 1967, told the council, “I'm here to talk about rate injustice. A $93 single-family rate versus $52 for a multifamily unit. We were told Milpitas was mandated to San Jose's basis for household size. I called San Jose, and they said they didn't know anything about it. I think some reality must be applied. It's totally unfair.”

Gary Tang added, “I feel the same as the last three people. I am not against rate increases, except when unfair. I could join a club to take showers there at better rate.”

The public hearing closed at 9:16 p.m.

Esteves asked how many seniors would be affected. Phelan said seniors identified themselves through sign-ups for garbage rates, but, “There has never been senior water and sewer rates.”

Councilwoman Althea Polanski remarked, “I'm thrilled about raising rates. It's critical to keep up our infrastructure. I'm one person in a single-family home. My cost is about $2.76 per day for all services; 14.5 cents per day for water. I'm probably looking at paying about $6 per day. I think that's a pretty good deal.”

A motion by Vice Mayor Pete McHugh and seconded by Polanski to adopt the water rate ordinance was approved. The council also adopted the sewer rate ordinance on a motion by Polanski that was seconded by McHugh.