May 7, 2013

Cal Water Rate Case hearing May 15

The Visalia City Council received an update Monday on California Water's request to the California Public Utilities Commission (CPUC) to increase water bills in Visalia by 28.3% over the next 3 years. The CPUC will hold a public participation hearing on the Cal Water Rate Case on Wednesday, May 15, from 6 to 9 p.m. at the Visalia Convention Center, 303 E. Acequia Ave. The public is encouraged to attend.

As the chart above indicates, Cal Water's revenue increased by 58% between 2007 and 2013, while inflation increased by just 12.3%. If Cal Water is successful in obtaining their proposed 28.3% rate increase, the increase in revenue will be 96% in just seven years. The graph also shows the per-service-connection revenue increase. In 2007, Cal Water earned $346 from every Visalia service connection. Today, Cal Water is receiving $545 from every service connection, and its requested rate increase would generate $676 in annual revenue for every service connection. The City's population in 2007 was 117,138. Today's population is 128,400, or an increase of 8%. It would appear that population growth is not dictating Cal Water's substantial revenue increases.

In contrast, the Division of Ratepayer Advocates' extensive review of the Cal Water rate case resulted in their recommendation of an increase of 9.7% over three years. DRA's chief areas of concern deal with: Cal Water's non-specific capital budgets; health insurance and pension plans for Cal Water employees and executives respectively; stock awards; and increased costs due to lower water sales. To review the staff report, click here.

Timeline: A final decision is due by the Administrative Law Judge within 60 days of it being submitted for his consideration. That decision is then forwarded to the full CPUC for consideration. It's expected the rate case process will conclude at the end of the year. Considerable time has been spent by City staff reviewing the application and testimony submitted by Cal Water in relation to their proposed multi-million dollar increase. The application and attachment are available for public review. In addition, the Division of Rate Payers Advocates (DRA), a division of the CPUC, has conducted an extensive review of the utility's application. On March 1, DRA submitted its reports, including an 84-page DRA report specific to the Visalia rate case. The DRA did recommend a significantly less increase, 9.3% over the three years, as opposed to Cal Water's requested 25.3% company wide and 28.3% Visalia District increases. To view the application, attachment, and DRA reports, click here.

Michael Olmos Appointed New City Manager 

The Visalia City Council unanimously appointed Michael Olmos as City Manager at Monday's meeting. Mike has been the City's Assistant City Manager for over seven years.

"Our City is quite lucky that we have an internal candidate like Mike who can take the reins and continue Visalia on a course of fiscal stability, smart planning and economic development," said Mayor Amy Shuklian.

After reviewing options for filling the vacancy with the upcoming retirement in the Fall of current City Manager Steve Salomon, the Council determined it was in the best interest of the City to give first consideration to Olmos. The Mayor and Vice Mayor reviewed employment contract proposals with Mr. Olmos and brought their recommendation to Council for approval.

"I'm appreciative of the recommendation by the Mayor and Vice Mayor," Olmos said. "It's humbling to follow Steve Salomon, who has done a great job for our community. I'm blessed to have worked with the best organization and employees in my career. I'll work as hard as I can to be an effective City Manager in meeting the goals and desires of the Council and the citizens of Visalia." 

Blue Ribbon Task Force to Consider Sales Tax Proposal 

A total of 62 Visalia residents will serve on a Blue Ribbon task force to consider a possible sales tax augmentation ballot measure.

The task force, led by Council-appointed co-chairs Gary Gagliolo and Janice Avila, will consider a sales-tax proposal and make a series of recommendations, including if and when the measure should go on the ballot, the amount of the tax, and how the money should be spent. Council also authorized a survey to determine whether Visalia residents would vote to impose the sales tax.

The task force will plan to meet every Tuesday, beginning today through June 25 at 7 p.m., and take a tour of the City facilities on Saturday morning, May 11. Task Force members also must miss no more than two meetings in order to participate in the discussions and final recommendations. The Council has asked for a recommendation from the Task Force by July 1, 2013. If the Council votes to put the measure on the November ballot, city officials would have to submit the paperwork to Tulare County by or around Aug. 10. To view the staff report, click here.