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OCEANSIDE: City approves water, sewer increases

Higher rates needed to remove credit watch

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Oceanside City Council members Wednesday approved substantial increases in water and sewer rates and agreed to pay more for animal-control services.

The rate increases would raise the monthly water bill for a typical single-family homeowner to $50.82, up from $42.42. The typical monthly sewer bill would rise from $35.11 to $45.48.

The vote was 3-1, with Councilwoman Esther Sanchez absent. Councilmen Rocky Chavez, Jerry Kern and Jack Feller voted for the increase, and Mayor Jim Wood voted against it.

"This is the responsible thing to do," Feller said.

Water Utilities Director Lonnie Thibodeaux said the increases were needed to remove a credit watch placed on the city last week by the bond rating agency Standard & Poor's.

"It's a critical condition," Thibodeaux said.

Standard & Poor's warned investors that current rates didn't raise enough revenue to keep the water and sewer system running and make regular payments on $18.6 million in outstanding sewer bonds.

Without the rate increase, Thibodeaux said, investors could sue to seek immediate payment of the entire $18.6 million in sewer bonds, "money we don't have," or get a court order to raise rates. He said Standard & Poor's also could downgrade the city's bond rating, which would make it more expensive for the city to borrow money for future projects

The increase in city water rates was needed to cover increased water charges from the San Diego County Water Authority, which raised its rates 18.1 percent starting Sept. 1. Oceanside imports 80 percent of its water from the county agency, which gets water from the Metropolitan Water District.

The higher Water Authority rates mean the city is paying $5 million more a year for water, Chavez said.

In other action, the council voted 4-0 to renew for one year the city's animal-control contract with the North County Humane Society at a cost of $788,670, which is $265,000 more than the city paid last fiscal year. The extra money would come from the city's reserve fund.

Council members also instructed City Manager Peter Weiss to look for alternatives to provide state required animal-control services.

"It's very critical to be fiscally responsible and make sure we're getting the best deal for our public," Feller said.

Humane Society director Julie Bank said the society needed to charge more for its services because an audit showed that past contracts with the city didn't cover its costs.

Bank said the society was "very sympathetic" to the city's budget problems as it struggles to plug a two-year $10 million budget deficit.

But Bank said that "for years" the city has been paying less than it costs to provide animal-control services. She said the Humane Society has provided animal-control services to Oceanside since 1963.

"We've been subsidizing the services that are mandated by law," Bank said.

"I can promise you now that any other options you find are not going to be as cost-effective," Bank said.

Call staff writer Ray Huard at 760- 901-4062.

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