LW’s water bill could double over next . ve years

WATER RATE HIKE

by Emma DiMaggio

Communications Manager

The Seal Beach City Council is considering water and sewer rate increases that could double Leisure World residents’ monthly water bills over the next five years.

On April 28, the Seal Beach City Council held a second study session to delve into issues related to the city’s failing water and sewer systems. Both systems are in dire disrepair.

Steve Gagnon, a project manager for rate consulting firm Raftelis, said the city must invest a “bare minimum” of $50 million in its water and sewer infrastructure over the next five years, with a recommended investment of $63 million.

“To sum it up, we are in the red. We have failing infrastructure, and we need to adjust rates to protect health and safety,” Seal Beach Public Works Director Iris Lee told the council. “We have aging infrastructure with a lot of emergency needs, and this is the best and most realistic approach to provide reliable water and sewer services.”

The City of Seal Beach is in a tough situation. A lack of investment in its water and sewer systems has led to system failures and costly emergency repairs, which it can’t afford.

For example, in late April, a water valve failed along Westminster Avenue, a major arterial road. It’s in need of replacement, but it can’t be repaired because, “we simply don’t have the money to do so,” Lee said, adding that the city is in a “vulnerable position.”

It’s already failing to meet its debt covenants, which are essentially promises the city made to its debtors to make its loan payments plus interest. If it can’t meet its covenants, it will be very difficult for the city to acquire the loans it requires for its critical infrastructure projects.

If the City of Seal Beach doesn’t raise rates, it will sink further into the red in September of this year.

Leisure World’s unique water system complicated past discussions This isn’t the first time that the Seal Beach City Council has discussed water and sewer rate increases. In 2024, the council considered increases but halted those discussions to study the issue

The cost of water in Leisure World is divided evenly between the community's 6,608 households.

Emma DiMaggio further. Currently, Leisure World receives water through two active 12-inch metered water pipes. The water that flows through these pipes serves all of Leisure World, then exits the community out of two 8-inch metered pipes that serve College Park West and nearby commercial areas.

Leisure World only pays for water used within its walls, and that cost is equally divided between the community’s 6,608 households.

Previously, Leisure World was charged the fixed service rate associated with a 6-inch pipe, since it was assumed that a 6-inch pipe would be adequate to serve the senior community.

However, the city-hired independent engineering firm AKM determined that Leisure World required two 12-inch metered pipes to account for peak needs and the high-pressure water flows that are required to extinguish fires.

If the new water rates are approved, that decision on pipe size will have major impacts on Leisure World’s water rates.

The recommended proposal would increase Leisure World’s fixed costs from $3,673.58 per month to $14,916.38 per month—a 306% increase in the first year.

By 2030, Leisure World would pay $21,239.12 per month in fixed costs related to water services.

“Leisure World is different. I agree that it’s different. I agree the fact that we get to pay maybe $15 a month while everyone else pays $40 a month seems, on the face of it, gosh that’s got to be unfair, that’s inequitable,” said District 5 Councilman Nathan Steele, who represents a portion of Leisure World. “I don’t think it’s inequitable. I think the 6-inch valve size that we did have was an equitable price.”

Steele went on to explain that the second 12-inch pipe serving Leisure World “hardly gets used,” and thus it was unfair to charge Leisure World a heightened fixed price for its second 12-inch pipe.

Sewer system plagued by similar deficits The city’s sewer system isn’t much better off than the water system. Infrastructure failures abound. Recently, sewage from Sunset Aquatic Center nearly overflowed into Anaheim Bay, which would have triggered costly fines. The pump station that serves the area couldn’t keep up with a spike in use.

Raftelis proposed a 34% increase in sewer rates starting in fiscal year 2026. The consultant’s conservative plan proposes the same increase. The system is currently failing to meet its debt coverage ratio—the minimum amount it must pay to cover its debts.

During the last sewer rate study, conducted in 2020, the city reduced rates by 25%. Rates were reduced because the city’s sewer reserves exceeded the reserve limit at the time, according to Lee.

That decrease “undoubtably contributed to where you (the city) are today,” Gagnon told the council. “I can count on one hand how many times I’ve had clients reduce their rates.”

If rates are approved, Leisure World residents will pay more for water and sewer in the coming years Under the proposed rates, Leisure World’s water and sewer bills will slowly increase over the next five years.

Based on the community’s average monthly water usage in 2024, residents will pay approximately $16.04 per month in fiscal year 2025. By fiscal year 2030, residents will pay an estimated $32.30 per month—more than double the current rate.

Exact bill amounts will fluctuate based on the community’s water use.

How did the city get here?

Several factors contributed to the city’s current financial position.

First, past city councils failed to increase rates to sufficiently cover ongoing and emergency maintenance costs.

Then, as infrastructure aged, unexpected breakdowns had to be addressed with costly emergency repairs. For example, the Bolsa Chica Well pumps affordable groundwater for the city to use. When that pump went down in 2024, the city spent three months importing water at twice the cost of groundwater.

Then, the pandemic and resulting inflation increased the price of infrastructure projects.

Both 2023 and 2024 were “wet” years where residents used less water than usual due to heavy rains. The less water the city distributes, the less money it makes. Increased rains drove down the city’s revenues and left them with less cash flow.

And wholesale water companies like the Orange County Water District has passed on increased rates due to state mandates to remove PFAS, otherwise known as “forever chemicals,” from its water.

How to share input on water rates The Seal Beach City Council is expected to continue its discussion on water and sewer rates, and the process for residents to submit protests, at its Monday, May 12, meeting, at 7 p.m. in the Council Chambers, 211 Eighth St., Seal Beach.

A public hearing is tentatively scheduled for Monday, June 14, at 7 p.m. in the Council Chambers, according to Seal Beach’s rate study website.

To learn more about the study, read frequently asked questions and find upcoming meeting dates, visit https://utilityratestudy. sealbeachca.gov/.

The recommended proposal would increase Leisure World's fixed costs from $3,673.58 per month to $14,916.38 per month—a 306% increase in the first year.