TUD Rate Proposal Clears Hurdle As District Faces Growing Deficit
Sonora, CA — With a 4-1 vote, the Tuolumne Utilities District board voted to send a legally required Proposition 218 notice to ratepayers noting an intent to increase water and sewer rates later this year.
Overall, it would increase revenues by 28% in year one (Fiscal Year 2024), another 2.6% in 2025, 2.4% in 2026, 1.2% in 2027 and 1.5% in 2028. The new rates would take effect on August 1st. The specific details are in the image box.
Thursday’s action during a special meeting was simply to notify customers about the potential increase, and a vote to actually implement it will come on June 14.
TUD Finance Director Steve Sheffield stated that if no action was taken, the district would face a $5.7 million deficit next year, and a projected $38 million deficit by the end of the five-year period.
The lone vote against sending the notice was David Boatwright, who stated that he understands the district needs more money, but opposed the “frontloaded” increase (28%) in year one.
Sheffield responded, “The further we delay this, and the longer we minimize the amount of the increase, the more we will continue to have that deficit, which would either prevent us from accomplishing projects, or meaning we have to cut some level of service.”
TUD General Manager Don Perkins stated that the rate increase is tied to inflation and the rising cost of doing business.
Perkins said, “The cost to build a tank is a lot more today than it was two years ago. A lot more. The cost of doing everything today is a lot more than two years ago. That’s why there is this big jump.”
Board President Jeff Kerns added, “When you turn the TV on at home and you see the news, and they talk about inflation, this is it. This is how it affects us in Tuolumne County, today. This is the reality of it, unfortunately.”
Board member Barbara Balen asked GM Perkins whether the rate increase would help the district cover the costs of potentially acquiring and maintaining PG&E infrastructure, such as Lyons and Pinecrest reservoirs. Perkins responded, “no,” and that the increase would help cover the costs of consultants and the related negotiation efforts, but additional revenue sources would be needed in the event of those negotiations being successful.
Perkins added, “It will take additional costs (taking on PG&E infrastructure), it just will. How we go about doing that is a different discussion.”
Of note, the board added an amendment to the motion to send out the 218 notice. It states that the directors will later have a conversation about potentially further studying raw water rates in comparison to other areas in response to concerns raised by agricultural leaders.
