Re-released March 2011

The City of St. Helena Public Works Department puts priority on providing the best possible service at the most reasonable costs. But the cost of securing a dry year water supply and the need to maintain our facilities to the highest standards, means that rate increases will  periodically occur. Rate increases are needed to ensure that city utility enterprises are meeting the financial obligations for ongoing operations, debt service, and capital improvements.

The last comprehensive rate study was completed in 2004, updated in 2008, and resulted in scheduled rate adjustments through January 2010. 

This brochure explains why the current rate increase is necessary.

1480 MAIN STREET | ST. HELENA, CA 94574 | 707.968.2658 B | 707.967.2806 F | WWW.STHELENACITY.COM
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WHY RATE INCREASES ARE NECESSARY

In the area of water service, several key factors impact rates for all customers. One is the need for ongoing rehabilitation projects to ensure our aging systems meet acceptable standards. Another factor is assuring our City will have access to adequate water in the event of a dry year. In the area of wastewater service, aging infrastructure, regulatory compliance, and system demands are making system upgrades increasingly urgent. The City of St. Helena needs to increase the water rates 58% and the wastewater rates 26%.

THE RATE INCREASES ARE DRIVEN BY:

· Capital improvement projects.  Proactive renovations are needed to ensure that City of St. Helena's aging water and sewer infrastructure systems remain in the best possible condition.  These projects consist of the removal and replacement of existing aging pipelines and facilities in order to meet acceptable standards and to prevent costly emergency repairs. 

· Cost of diversifying water portfolio.  The comparison of water supply to water demand indicates the City ultimately faces the risk of water shortage under historic supply and current operating conditions.  In order to reduce that risk, especially in dry years, the City of St. Helena entered into a water purchase agreement with the City of Napa.  This “Napa Water” is currently supplementing our supply at a minimum rate of 400 acre-feet a year.  The Napa Water obligates the City to purchase the water but it also provides a critical supply that did not exist prior to 2006.  A diversified water supply portfolio, may cost more money, but it is a prudent means of ensuring sufficient water during the dry seasons when it is really needed. 

· Water Conservation and Efficient Water Use program.  The City must find ways to encourage water conservation and efficient water use, as well as improve the equity of both water and wastewater rates across all customer classes. The ongoing operational cost of a Water Conservation Coordinator and Efficient Water Use program must be covered by rates. 

· Debt service.  Until recently, the utility departments have been able to cover operating and maintenance costs, including debt service payments, through current rates and other revenues. However, as a result of required water purchases from the City of Napa and a significant backlog of capital projects, including the removal of Upper York Creek Dam, it will be necessary to issue new debt. Rate increase is necessary to make the new debt payments.