TUSTIN : Council OKs Budget, 15% Water Rate Hike

After state cuts forced the city to trim $445,000 from its budget, the City Council this week approved its 1992-93 budget, saying the cuts will minimally affect service and jobs.

The council Monday night also approved a 15% water rate hike--about $3 more per household a month--to cover increases in future capital improvement plans to the city’s water system, as well as increased operation costs.

The council delayed adoption of its budget until the state budget was finalized. The final state budget eliminates the city’s cigarette tax disbursement, imposes jail booking and property tax collection fees and takes half of city traffic fine revenues along with the 9% of its property taxes.

The city projects another loss of $200,000 in 1991-92 sales tax revenue.

The council approved the recommendation to eliminate the vacant switchboard operator position in the Police Department, reduce capital outlay expenditures, travel and meeting accounts by $50,000 each and reduce consultant contracts by $100,000.

Last year the city lost more than $600,000 in state revenues, and Finance Director Ronald A. Nault predicted another possible loss of $600,000 next year.

Although the water rate increase goes into effect Nov. 1, the Water Department’s bimonthly billing cycle makes water used after Sept. 25 subject to the new rate.

The average household uses about 40 units of water (a unit is 748 gallons), and the average bimonthly bill is $40.

The previous billing plan charged 71 cents per unit for the average household. Water will now be billed in blocks: 85 cents for seven to 40 units, $1 for 41 to 60 units and $1.10 for more than 60 units. That rate will go up about 5% each year for the next two years, and will then be re-evaluated.

Under the old rate, a fixed $9.77 was charged per meter. That charge will go up to $11 under the new rate.

The Water Department proposed raising its rates after an analysis showed that major system improvements would be required to maintain the water system’s reliability and that substantial additional funding was needed to complete the necessary improvements.

The 12-year improvement plan will include fixing and enlarging city reservoirs, digging new wells and cleaning chemically contaminated water.

Improvements will allow the city to rely less on purchased water, said Assistant Finance Director Larry Schutz. The Water Department estimates that the price of purchased water will increase threefold within the next few years. The department is already suffering water supply losses from Northern California and the Colorado River and predicts more losses in the near future.

Water is not subsidized by taxes or city revenue, and the only place for the Water Department to make money is through increasing its rates, Schutz said.

The council also voted to reinstate agricultural credits, which in the past gave about a 5% water credit to property owners with orange groves.