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Businesses balk at fees

Environment: Officials say bond measure could be required if rate hike doesn’t get approved

Posted: July 1, 2010 7:10 p.m.
Updated: July 2, 2010 4:55 a.m.

The Santa Clara River, which flows from the Santa Clarita Valley into Ventura County, is where wastewater is discharged after treatment. The Los Angeles Regional Water Quality Control Board ordered the local sanitation district to lower chloride levels in the water before the treated water enters Ventura County.

A planned sewer-system hookup fee — part of a package of sewer-fee rate hikes proposed Santa Clarita Valley-wide — is necessary to avoid future bond measures, a sanitation district official said this week.

But it spells disaster for the business community, some sources say.

Maria Gutzeit, member of the Newhall County Water District board and a business owner, said the hookup-fee rate hike is “an absolute deterrent” to businesses looking to locate in the valley.

Ed Masterson, interim president of the Santa Clarita Valley Chamber of Commerce, called it “a knife through the heart” for local business.

Sanitation district officials say they know rate hikes are painful.

“On one hand, I’m sure it has a little bit of impact,” said district spokesman Dave Bruns, who on Tuesday fielded complaints and criticism, questions and advice, from local ratepayers during the first of a series of information meetings on the issue.

“The problem is: If you don’t pay for the connection fees now, you won’t have enough money later,” he explained. “It really becomes a decision for the community.”

If the district isn’t able to build a connection-fee fund based on new businesses opening, then the community could wind up having to approve a bond measure to extend sewer service when the community grows, he said.

“Which is more important to the community: Having business come into the community and subsidize it, or having business foot the bill themselves?”

Those proposed connection fee hikes — if not the death knell for new business — are certainly significant, district documents show.

If someone wanted to open a laundromat in Santa Clarita today, that person would have to pay a connection fee of $54,910 for every 1,000 square feet of space the business occupies.

If the proposed rate hikes were in effect, that same person could expect to pay a connection fee of $62,135 per 1,000 square feet for the same occupied space, according to the district’s rate sheets.

In four years, under the proposed rate hikes, that new laundromat connection fee would be $79,475 per 1,000 square feet.
$300,000 hookup fee

Greg Amsler, owner of the Salt Creek Grille restaurant at Westfield Valencia Town Center, said he wonders if he would be able to set up shop in Santa Clarita today if the higher fees were in place.

“If I wanted to open Salt Creek today, it would cost me $300,000 in hookup fees,” he said.
“These rates are going to deter business from coming here.”

When asked about the $300,000 fee, John Kilgore, supervising engineer in the sanitation district’s financial planning department, responded: “Restaurants have a high strength discharge.”

Washing dishes on a large scale takes up a lot of water, he pointed out.
The district has drafted a list of proposed connection fees for various industrial and commercial categories.

A business person setting up shop today in Santa Clarita, hoping to do business on 1,000 square feet, would pay $1,444 to be connected to the sewer system.

Under the proposed plan, the same person could expect to pay $2,090 in 2013.

A church for Santa Clarita?
Today its sewer hookup would cost $722. In four years, it would be $1,045.

A warehouse with 1,000 square feet could open today with a connection fee costing $494; but in four years, the same space would cost $715.

Gutzeit said she has trouble reconciling a warehouse paying high hookup fees when the owners are probably only looking at water in terms of a couple of toilets.

“Why would a big warehouse pay a big fee if it doesn’t have the discharge there?” she said Thursday. “It really doesn’t make sense.”

But the rate-hike increases are just proposed numbers — for now.

Ratepayers in the Santa Clarita Valley can erase all those numbers and come up with brand-new math for development if they sign the preprinted protest forms mailed to them by the Santa Clarita Valley Sanitation District.

A little more than 34,000 signatures will reset the rate discussion and wipe the slate clean.

It will not, however, reduce the amount of chloride in the Santa Clara River. And that — say more than a dozen water officials interviewed by The Signal over the last month — is the real issue.

Ratepayers pick up chloride cost
Ventura County farmers, particularly growers of chloride-sensitive strawberries and avocados, expect treated water discharged into the Santa Clara River by upstream users to contain no more than 117 milligrams of chloride for every liter of water. Chloride is a naturally occurring substance found in table salt.

As downstream users, the farmers are entitled to water that is virtually as pure as rainwater, according to the federal Clean Water Act of 1972 and the state’s Porter-Cologne Act of 1969.

If the Santa Clarita Valley Sanitation District doesn’t hold the line at 117 milligrams or less of chloride per liter that its users discharge into the river, the Los Angeles Regional Water Quality Control Board could fine the district $3,000 to $10,000 every day it’s out of compliance.

That cost would likely to be passed on to ratepayers.

After a year’s worth of fines, it could total $3.65 million.

The district, however, plans to build a chloride-ridding reverse-osmosis plant. The plant’s price tag is estimated at $210 million.

To pay for the initial costs of the plant alone — consultants, an environmental assessment, planning — before a single shovel goes into the ground, the district hammered out a four-year proposed hike in rates.

The increased funds would also go to pay existing operating costs.

Sewer base rate
Here’s how the district calculates your bill, based on one universal base rate:

The rate is the same for homeowners, businesses and industry, said Kilgore, the supervising engineer in the district’s financial planning department.

The rate is based on the amount of water discharged by an average single-family home.

Property owners who are hooked up to the sewer system — including homeowners, restaurateurs, car-wash owners, car dealerships and all other industrial users — pay a rate based on 260 gallons of water discharged per day.

This “flow” rate, Kilgore says, reflects how much water a single family, with children, will use on a daily basis through showers, dishwashers, brushing teeth and other family water-using activities.

The cost to one family per year is $199.

Members of the Valencia Auto Association, collectively, are anticipating a sewer bill between $200,000 and $300,000 a year.

This means they expect to pay the district roughly $200,000 a year because they discharge the same amount of water that 1,000 households would discharge, Kilgore explained.

If a family uses 260 gallons a day, the same family discharges 93,600 gallons in a year.

So an industry such as car dealerships that use 1,000 times that amount would discharge 93.6 million gallons a year into the sewer system. From there it is run through treatment plants and is released into the river.

In addition to the “flow” of discharged water (260 gallons a day), the district also considers two other factors in calculating your bill based on a common model.

It takes into account the “strength” of discharged water, which entails two things: the cost of treating organic matter, and the cost of treating suspended solids.

Organic matter: The base rate is calculated according to 1.22 pounds discharged per day per family.

Described as biodegradeable solid waste such as food waste, human waste and toilet paper, organic matter requires bacteria to “eat” the material. Inside the treatment plants, the district feeds oxygen to the biodegrading bacterium.

Suspended solids: The base rate is calculated according to 0.59 pounds discharged per day per single family. This deals specifically with waste that can skimmed off the top or dredged off the bottom during treatment at the plants.

The water is also run through a series of aeration tanks, sand filters and disinfectants before it is released into the Santa Clara River.

It’s a costly procedure, Kilgore said, all conducted with no special consideration for reducing the amount of chloride in the water.


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