Cost of improvement projects could double water rates

by Kollin Kosmicki
Hollister Free Lance, 5/20/13

Although city residents can expect improved water quality in the coming years due to a series of planned projects, they also can look forward to a significant spike in their water rates, with those figures possibly set to inflate by more than 100 percent over six years.
Hollister council members Monday heard presentations regarding the $30 million “Hollister Urban Area Water Project” – which also involves the Sunnyslope Water District and San Benito County Water District – and the impact it could have on rate payers’ bills.

That scaled-back initiative – it was originally estimated at about $200 million – involves a series of water improvement projects largely intended to lower salt content, increase reliability for the supply and protect the groundwater basin, according to the recently launched project website,

Project Manager Harry Blohm offered the council a summary on the project’s history, which started with a master plan agreement in 2004, before a representative with Raftelis Financial Consultants provided three scenarios for rate increases. Those scenarios vary based on financing and expanse of projects – with one option including overhaul of the downtown water main system.

The three scenarios include a 12.5 percent annual increase over six years; a 13 percent increase over five years; or a 13 percent increase over four years before respective 8 and 5 percent hikes in years five and six.

When compounded year over year, the rates are set to exceed a 100 percent increase over the life of the hike, the consultant confirmed.