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TUD Rate Hike Likely

Sonora, CA — The Tuolumne Utilities District (TUD) Board got a rundown on its significant revenue shortfall from the drought, due in part to conservation measures, and details on what could amount to a $32 a month customer rate increase to cover the bottom line and make needed infrastructure improvements.

General Manager Tom Scesa set the tone at Tuesday’s meeting, stating, “We have a significant infrastructure and budget problem that we need to address. The districts water account or fund is in dire straits and it needs money real soon.”

If the board decides to go for a Proposition 218 rate hike, the estimated monthly increase for a basic residential customer could go up by as much as $19.50 for water and $12.18 for sewer. Another option would be a drought surcharge to cover the District’s nearly $1.8 million in conservation related revenue loss. Scesa asked the board, “Which path do we want to go down, the short term repair for the drought shortfall or do we want to go down a longer term [Prop 218 rate hike]?”

Several board members expressed support for using both options, and conducting a rate study. Director Ron Kopf stressed they need to operate as a business, “We need to do it in a two tier deal. We need to look at the drought surcharge and we need to make sure that the rate study we go for is very open and understandable.  What we’ve learned from the previous rates is that when you’ve established a rate on where you need to go, and then you end up with a lower amount, all you’re doing is deficit funding and you have to raise it larger the next time.”

No final decisions were made at the meeting. Next Tuesday, in its budget workshop meeting, the board will discuss possibly hiring a consultant to help navigate the Prop 218 related legal processes.