Seal Beach residents may soon see a nearly 33% hike in water and sewer rates this summer to combat years of rising inflation, mounting infrastructure repairs and looming city debt.
On Monday, City officials proposed a water fee increase from $3.49 to $4.64; Wastewater costs would go from $24.02 to $32.43 – increasing by a third of the initial cost.
Seal Beach City Council members decided to give residents more time to learn about the proposed fee increases – scheduling a final decision in May.
Meanwhile, city staff are raising concerns of aging water and sewer infrastructure around the city.
It comes as residents across Orange County are seeing their water and sewer rates increase – mostly due to aging infrastructure.
[Read: 2023: The Year of Orange County Water Woes]
Seal Beach Public Works Director Iris Lee said the city could see major cuts to public services if the officials don’t increase rates.
“Without [capital programs], the water and sewer is approximately $2 million in negative cash flow,” Lee said during Monday’s meeting. “Including CIPs, it’s $16 million.”
According to a city report, Seal Beach lost $600,000 in water revenue for 2021.
It’s a trend city staff does not see changing.
“If this were to impact our general fund, this means major cuts in essential services,” Lee said – adding it could mean cuts to public safety, community services, senior transportation, parks, beach maintenance, graffiti removal, road repairs and street sweeping.
“That’s just the tip of the iceberg,” she said.
Seal Beach City Councilmember Thomas Moore pushed for a special meeting to be held prior to sending another notice, giving residents and officials more time to review capital improvements needed around the city.
“Maybe one day prior to the next public hearing to review the [capital] projects in detail, ask questions, go through each of them and see what’s really needed,” Moore said.
While his colleagues wanted more time to review the issue, Councilmember Joe Kalmick raised questions about what the delays could mean.
“I’m concerned about the infrastructure in this city. I’m concerned that we’ve had 3 water main breaks in just the last few months,” Kalmick said during Monday’s meeting.
Kalmick added that discussions about water and sewage fees presented by city staff have been ongoing for several meetings.
“We can do it again, which sounds like what we’re doing here – just doing what we’ve been doing for 5 months.”
Increasing Sewer and Water Rates Across OC
Seal Beach is one of several Orange County cities recently to propose rate increases for public services.
Santa Ana City Council debated last week on a street sweeping hike more than doubling the initial fee that could go into effect this summer.
[Read: Will Santa Ana Residents Have To Pay Double For Clean Streets?]
Cities like Huntington Beach saw their water and wastewater rates increase by 10% and 13% this year.
Similarly, Trabuco Canyon also saw bills increase this year – water rates increased by 33% and wastewater by 16%.
Seal Beach City Project Manager Steven Gagnon said in a regular meeting on Feb. 12 that inflation, aging infrastructure and loss in water revenue led to the need for the city’s recommendation.
“The plan we have in front of you tonight assumes that you will take on more debt for water and wastewater systems,” Gagnon said. “If you don’t take on more debt, that means you would have to cash capital projects, which means rates would go up even more.”
Gagnon added that the city’s debt service coverage pledged to cover 1.2 times the amount – or $1.20 per every dollar – in debt owed for water services, which is not close to being met. A debt service coverage ratio is a measure of cash flow available to pay current debt obligations.
“Unfortunately the smaller the city, the larger the rates and charges are,” Gagnon said.
Gagnon added that agencies like the Irvine Ranch Water District rely solely on property taxes.
“In fact, all of their capital costs are through property taxes. You don’t have the luxury here,” Gagnon said during the Feb. 12 meeting.
Hugo Rios is a Voice of OC intern. Contact him at hugo.toni.rios@gmail.com or on Twitter @hugoriosss
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