Beginning with their Dec. 1 bills, many Solvang residents will be paying more for their water, and some contend the city’s new rate schedule creates an unfair disparity between homeowners and commercial businesses.
The Solvang City Council unanimously decided on Oct. 10 to enact the rate increases, reporting that those with the smallest water meters would go up 5.25 percent, compounded yearly until 2015. However, homeowners with larger meters—which allow for more water capacity—will be hit harder, with their bills going up nearly 150 percent for a one-inch model.
According to Solvang City Manager Brad Vidro, the increase is to fund construction of new wells and a water treatment plant, and to pay for rising costs of operation. It also helps pay off a $2.4 million annual debt for the city’s state water contract, which residents voted for in 1991.
Water rates in Solvang are fixed and charged like a tax, whether water is used or not. Vidro said that, in adjusting the rates, the city had to comply with Proposition 218 restrictions, which require equity between residential and commercial rates.
A study conducted by San Francisco-based consultant NBS determined the commercial sector had been paying too much, he said, so the city removed charges tied to the number of seats in restaurants and rooms in hotels, switching to fixed rates determined by meter size.
“Prop. 218 requires us to evaluate the system user all the same,” Vidro said. “You can’t say commercial should be paying more because they’re commercial, or vice versa.”
Nancy Orchard, a former Solvang mayor and councilwoman, argued that moving to a flat rate for commercial users unfairly shifts the burden of paying off the city’s $84 million state water debt to the city’s homeowners.
She said the fixed rate on her residence, which has a three-quarter inch meter, would jump 53 percent in the next year, from $61.14 to $93.54. Orchard compared her costs to the 122-room Hotel Corque, owned by the Santa Ynez Band of Chumash Indians, which will see a 49-percent decrease in its monthly water bill.
“If the basis of this rate increase is to make money for the city … the first thing is it makes no sense,” Orchard said. “The second thing is it’s totally inequitable.”
Orchard called Proposition 218’s wording “ambiguous” and “fuzzy,” and said she believes commercial interests spurred the rate change.
According to Vidro, most Solvang hotels will initially see a reduction in their bills, which will stay relatively the same until next year’s increase. As to whether businesses as a whole will be paying less for their water, Vidro said it depends.
“I think there are some commercial properties that are going to see a decrease,” he stated. “Some will go up, some will do down, but now what we’ve done is say everybody is treated equally.”
Vidro explained that the overall result of the new rate system is a more balanced approach than before, proportioned based on demand.
“For those larger meters, they’re going to be paying their fair share of the burden,” he explained. “Historically it’s not been paid based on what its capacity is to the system.”
According to the city, minimal water users with the smallest meters—five-eighths of an inch—would actually see a small decrease in their water bill for the first year.
Fred Kovol, a former Solvang city councilman and engineer, said he saw the new rules coming and moved down to the smallest-size meter years ago. He said his monthly bill for water and sewer runs between $110 and $115, and would be going down slightly.
“We had one bad month the way I look at it, but the rest of the time, we’re very frugal around here,” Kovol said. “We have everything at drip.”
Even before the rate hike, Solvang, which uses state water, had the second-highest water rates in Santa Barbara County, behind only Casmalia. The overall costs to users will go up, but not for everyone.
“Will [businesses] be getting a break?” Kovol said. “Sure, they’ll be getting a break, and the residential users will be going up for the consultants to equalize everything.”
The new rates kick in on Nov. 21, when the meters are read for the December bills. Kovol said most residents likely won’t feel the effects until the rainy season ends in April.
“The hope is that people will get used to a little bit higher bill and then you’re overcome by events,” he said. “After four or five months, you probably won’t be as mad about it, rather than having started this increase in July.”
The changes have sent homeowners scrambling to get their meters lowered to smaller sizes. However, the city has instituted a rule barring people using 3,200 cubic feet or more of water per month from downgrading. Additionally, residents who qualify and wish to install smaller meters will be charged between $270 and $370 to make the switch.
Of the roughly 2,000 customers with water meters in Solvang, about 600 have the largest size meters—three-quarter and one-inch. Those customers will be paying nearly 85 percent of the total rate increase, according to figures available from the city.
Solvang homeowner Hazel Mortensen, who has the smallest size meter and will see a 5.25 percent increase each year, said the new rate structure would disproportionately penalize people with larger lots and older homes.
“How can it be equal if a widow living alone, if she has a one-inch meter, hers can go up 150 percent and [others] go down 49 percent?” Mortensen said. “The rules should be for everybody. … I don’t see anything fair in it.”
The roughly 150 Solvang residents using one-inch meters—such as the homeowners living in Alisal Ranch—will see their monthly rates go up 140 percent, from $61.91 to $151.90 per month. Several Alisal residents said they’ve held meetings addressing the disparity and plan to air their grievances at the next City Council meeting, set for Nov. 28.
The Alisal Homeowners’ Association is taking the position that it’s unfair for larger meter users to be charged a disproportionate share of the new rate increases. As one Alisal resident, who wanted to remain anonymous, said, “They’re singling out the larger water meter customers and putting it all on us.”
Orchard, who ran her mayoral campaign on water issues, said it was “counterintuitive” to give breaks to commercial interests if the city’s goal is to raise money. She believes the City Council could’ve been more forthright about the true costs and the disparities in charges.
“I think they’re targeting the wrong people,” Orchard said. “Just because you’ve had your home for 30 to 50 years doesn’t mean you should be penalized by having to pay more to bring in state water.
“They’re trying to make this equitable,” she continued. “But I don’t think it’s happened yet.”
Contact Staff Writer Jeremy Thomas at jthomas@santamariasun.com.
This article appears in Nov 17-24, 2011.