City of Stockton proposes 26 percent water rate increase — Is this a smart move to pay off debt?

City of Stockton proposes 26 percent water rate increase — Is this a smart move to pay off debt?

Just a couple of weeks after the City of Stockton came under fire for adding chloramines to residents’ drinking water, officials may be in talks to propose a 26 percent rate increase for water.
Although Stockton has warned residents on multiple occasions of eventual rate increases, the timing could not be worse to break the news. According to Mel Lytle, the director of the city’s Municipal Utilities Department, there is no way to avoid raising rates for the next year. However, a 26 percent hike seems a little over the top.
According to Lytle, “In order to meet debt service coverage and keep utility solvent,” the rates have to increase for residents using water from the City of Stockton North Water Service.
What Lytle means is that the city is simply not selling enough water to keep afloat. Because residents have been so active and persistent on water conservation, Stockton is not selling a substantial amount of water. Although that is a win for California, debt is drowning the City of Stockton.
To keep things running smoothly, a city must make a certain amount of revenue. Because Stockton invested in a $220 million Delta drinking water plant a couple of years ago, it must still repay that debt.
Due to residents’ diligent water conservation habits, however, the debt is taking even longer to repay. In an effort to keep Stockton from falling even more into the depths of bankruptcy, city officials have proposed a 26 percent increase in water rates.
Although it may seem unfair for the city to raise the rates of something as fundamental as water, it is necessary to earn revenue and pay debts due to infrastructural investments the city has already made.
Because El Niño did not end the drought, Gov. Jerry Brown did not lift the emergency conservation rules the state of California had implemented, and it doesn’t seem like he is going to any time soon. Water experts, however, claim that residents will continue to conserve water even after the drought ends because it has become routine, which will only end up hurting the city.
This is one rare situation where raising prices of something so basic could help an entire city. If water rates remain the same, the city of Stockton may fall into greater debt, which in turn would hurt its residents.
Rythem Gauba ‘16 believes the rate increase would “definitely hurt people, but not to a large extent. It would help the city in the long run.”
Ultimately, it’s a vicious cycle of both financial and socioeconomic problems, and this particular issue is one of many that may prove difficult to combat.

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