Proposed sewage rate changes would be costly for Escondido businesses

By: PAUL EAKINS - Staff Writer | Saturday, August 25, 2007 11:18 PM PDT ∞

ESCONDIDO ---- A proposed sewer rate change that would result in different rates for different types of businesses is expected to cost some Escondido companies hundreds or even thousands of dollars a month.

City officials say the proposed change is a more equitable way to charge companies for the sewage they produce, but business leaders have expressed concern about the effect of the new rates on companies' bottom lines.

"If you're trying to be fair, you look at who's having the biggest impact on the sewer (system) and charge them more," City Manager Clay Phillips said last week.

But Harvey Mitchell, chief executive officer of the Escondido Chamber of Commerce, said last week he is concerned about the effect the new rates would have on small businesses, which make up about 90 percent of Escondido's companies.

"I can understand there should be more of a charge, but not a huge amount," Mitchell said. "We want to make sure that (business owners) feel it's fair and that we just don't throw all the fees on the business community."

Residential wastewater rates also would increase, by about 9 percent, which would boost the estimated wastewater charge of a single family dwelling from $34.50 to $37.65 monthly, according to city officials.

The city has been notifying businesses about the change, but a database software problem caused a delay, pushing back the date for a City Council public hearing on the rate change from September to Nov. 7, said Mary Ann Mann, the city's utility manager.

If approved by the council, the new sewage rates would go into effect Jan. 1, Mann said.

The proposed changes, which were presented to the council in June, would more than double or even triple sewer rates for commercial laundries, hotels, grocery stores, restaurants and other businesses. The popular Stone Brewing Company could be affected most of all, city officials have said.

The city has estimated the brewery's monthly sewage bill of approximately $1,000 per month could increase to $10,000 per month with the new rates. The sewer bill of a grocery store with a meat department could go from $203 to $738 monthly.

But Steve Wagner, president and brewmaster at Stone Brewing, said last week he doesn't feel targeted by the city, noting that breweries do produce more biological waste and greater quantities of sewage than many businesses.

"They're not picking on us or singling us out," Wagner said. "Obviously, we generate some high-strength effluent."

However, the proposed rates clearly would cost his company more, he said. Stone Brewery is planning to install a pre-treatment system at its Citracado Avenue location to reduce the amount of biological pollutants in the sewage that the city must treat, Wagner said.

The $10,000 monthly sewage bill then would be a "worst-case scenario," he said, but the pre-treatment system won't be cheap. It probably will set the company back about $1 million, Wagner said.

Added to that will be the 8,000 to 12,000 gallons of sewage per week the brewery trucks elsewhere for treatment because the city wasn't able to handle the massive amount of sewage with high biological content produced by the brewery, he said. The city and the brewery have been working together to allow that waste to be treated by the city as well, Wagner said.

"We don't expect to have to do that much longer," Wagner said.

The brewery produces about 160,000 gallons of waste per week to produce about 50,000 gallons of beer, he said.

While the city plans to charge businesses more for sewage treatment, it too is facing higher sewage-related costs in the near future.

The city's Hale Avenue sewage treatment plant, which handles about 15 million gallons of waste a day from Escondido and Rancho Bernardo, will reach its capacity of 18 million gallons a day by 2014, according to a report commissioned by the city last year.

That report says the plant and the pipeline that carries its treated waste to the Pacific Ocean near Encinitas will need "near-term" improvements, construction of which should begin next year at a cost of about $10 million. Long-term improvements to increase the plant's capacity from 18 million gallons a day to 27.5 million gallons a day need to be in place by 2041, the report says.

Expanding the Hale Avenue plant will cost about $120 million, the report says, which is more than the city's 2006-07 operating budget of $83.8 million. Replacing the pipeline, which Escondido shares with other cities, could cost more than $200 million, the report says.

The sewage rate changes would give the city an extra $1.6 million in revenue to help support its $22.1 million wastewater budget.

Other cities in the county, including San Diego, Vista and Poway, already have sewer rates in place based on the type of business. However, the Vallecitos Water District, which handles sewage for San Marcos and parts of Vista, Carlsbad and Escondido, doesn't.

Dale Mason, assistant general manager for the water district, said sewage rates are based entirely on wastewater flow, not the amount of biological waste in the water.

Vallecitos sends its water to an Encinas treatment plant, and that plant evaluates the type and amount of waste from Vallecitos four times a year, Mason said. Those analyses are used to determine how much to charge Vallecitos, which then passes on the cost to its customers, meaning that everyone pays for the companies that produce more polluted waste, he said.

More than 10 years ago, the water district considered changing its rate system to one similar to what Escondido is considering, but decided that could hurt the local economies, Mason said, reflecting a fear expressed by Mitchell, of the Escondido Chamber of Commerce.

"If we came up with a program like that, and the surrounding communities did not have that, we would probably be driving businesses out," Mason said.

Contact staff writer Paul Eakins at (760) 740-5420 or peakins@nctimes.com.