City of Scotts Valley
Proposed Wastewater Rates
The City of Scotts Valley is proposing wastewater rate increases for residential and commercial customers to meet the ongoing and future costs of operating the City’s wastewater and recycled water utility. The City’s Wastewater Reclamation Facility processes 800,000 to 1,000,000 gallons of wastewater each day, serving over 12,000 residents and businesses in the greater Scotts Valley area. The wastewater is treated to standards to make the effluent water safe for discharge to the ocean and for recycled water use in public parks, school facilities and landscaping across Scotts Valley. Wastewater is highly regulated and the City undergoes rigorous testing and monitoring. The plant operates 24 hours a day, every day.
The treatment plant requires ongoing replacement and repair of its large and highly-specialized equipment. Pumps, aeration systems, filters, screens, tanks, trucks and pipelines within the treatment plant require regular maintenance and upgrades to maintain a safe, efficient and compliant utility. In addition, the City is responsible for the maintenance and replacement/repair of a complex wastewater collection system that carries wastewater away from residences and businesses in the service area to the treatment plant. This collection system includes over 40 miles of pipelines under our streets and 7 lift stations to pump the wastewater.
The City recently conducted a Wastewater Rate Analysis to calculate the costs to operate the plant in the coming five years and what rates must be in place to cover these costs. The City legally cannot charge rates that exceed the necessary costs to operate the utility. This analysis determined that rate increases are necessary to maintain a functioning plant and collection system. For years, rates were artificially low. In nearly 25 years of operation, rates were increased only 4 times. As a result of recovering fees below the true cost of operating the utility, the City deferred maintenance and equipment replacement. The long deferral of investment has led to a backlog of capital investment and those needs are now significant and critical. The wastewater plant cannot safely and continuously operate without a substantial level of investment in the next five years.
To learn more:
The Scotts Valley City Council will hold a Public Hearing on Wednesday, June 16, 2021 at 6:30 p.m. during the regular City Council meeting. At the meeting, the City Council will consider adoption of the proposed wastewater rate changes. Interested persons are encouraged to attend and comment. In accordance with COVID-19 public health protocols, the meeting will be held virtually. It can be accessed through this link: https://us02web.zoom.us/j/82882075837 or by calling 1-669-900-9128 and entering the meeting code 82882075837#.
Property owners and customers may file written protests against the proposed rate increases. Under state law, protests must be submitted in writing or electronically and must:
1) identify the affected property or properties, such as by address, Assessor’s Parcel Number, street address, or customer account number
2) include the name and signature of the customer or property owner submitting the protest, and
3) indicate opposition to the proposed wastewater rate increases.
The proposed rates cannot be adopted if written protests are received from a majority of affected parcels with one written protest counted per parcel. Written and signed protests can be mailed to: City of Scotts Valley, Wastewater Rate Protest, One Civic Center Drive, Scotts Valley, 95066. Written and signed protests may also be emailed to firstname.lastname@example.org. All written protests must be submitted prior to the close of the Public Hearing on Wednesday, June 16, 2021.
Why is the City Proposing the New Rates?
Rate increases are needed to fund wastewater treatment operations and maintain wastewater equipment in good working condition. The Wastewater Reclamation Facility is nearly 25 years old and has aging parts in immediate need of replacement and repair. The collection system— the network of pipelines and lift stations that collect wastewater from homes and businesses throughout the City for treatment—is also aged, in poor condition and in need of significant replacement and repair.
The City charges rates only equal to the cost of running the treatment services. The new rates were based on an analytical study that calculated the necessary future costs to operate a safe and efficient treatment plant. The rate study accounted for fixed costs for the Facility’s 24/7 readiness to treat wastewater as well as customer usage.
The City is also planning for the future. While there are urgent repairs in the next few years, due to the plant’s age and heavy usage, the City will need to consider a major rehabilitation or replacement project. Changing State environmental regulations, prioritizing reuse of water and cleaner new filtration technologies are under consideration. The new rate structure prepares the City for this next generation of wastewater treatment, while keeping rates below or in line with other treatment plants.
What are the New Rates?
The City has only raised rates four times in nearly 25 years and rates adjustments were put on hold last year during the COVID-19 pandemic. The City is proposing to phase in annual wastewater rate increases over the next five years as shown in the table inside. The first rate increase will be effective July 1, 2021. Residential customers will be charged a flat monthly rate collected on the property tax roll. Commercial and industrial customers will pay usage-based charges based on customer class and metered winter water consumption, subject to a minimum monthly charge. Commercial and industrial charges are billed according to three customer classes based on wastewater strength including Low, Medium, and High strength. (See the Commercial Classifications Based on Strength inside, for an indication of which types of businesses are included in each class).
What is the impact to a single-family household?
The monthly wastewater rates will shift less than $5, from the current $46.49 to $50.68 per month on July 1, 2021. They will progressively increase over the next four years to $71.54 per month by July 2025. There are different rates for multi-family residential and mobile home customers. A low-income rate also is in place for all residence types.
Scotts Valley’s rates, even at the end of five years, fall in the low- to mid- range of rates at comparable regional treatment plants. Scotts Valley operates its plant cost-efficiently and the increase in treatment plant rates is needed for its continued safe and effective operation.