The Rialto City Council this week voted 4-to-1 in favor of entering into a 30-year lease of the Rialto municipal water system with New Jersey-based American Water Works Co., Inc.
Under the terms of the deal, American Water Operations and Maintenance, Inc., a division of American Water Works that will function as a local company known as Rialto Water Services, will take over operation and maintenance of the water district. The city will retain the district’s water rights.
The company would further take on all aspects of operations, maintenance and billing, effectively running both the water and sewer utilities for the next three decades.
Water and wastewater division employees will be allowed to transfer into the city’s engineering or public works divisions if they wish, remaining as city employees with their public pension plans intact or can go to work with American Water, which would be required to guarantee those employees will remain employed for at least 18 months with salary and benefits equal to those offered by the city. That guarantee would sunset after 18 months
American Water Works is a for-profit investor-owned water and wastewater utility company. According to city officials, the company has agreed to make somewhere in the neighborhood of $45 million in upgrades to the water system. American Water has also agreed to assume all debt owed by the city’s water utility division and fund all needed infrastructure improvements to the system.
In return, city officials have agreed to a 114.8 percent increase in water and wastewater rates by 2016, such that the average water bill of Rialto households utilizing 17,000 gallons per month will jump from the current rate of $26.27 per month to $64.14 monthly and increase the wastewater treatment fee from $25.97 to $61.46 as of January 1, 2016.
Four-fifths of the city council indicated they had come to the conclusion that the arrangement with American Water is the only viable means of salvaging the decaying municipal water system.
Councilman Joe Baca Jr., who previously joined with councilwoman Deborah Robertson in opposing the American Water contract last year, was the only vote against it on Tuesday. He said the rate increases were too high and would fatten the company’s profit margin.
Mayor Grace Vargas, who because of a health-related absence missed the vote in June resulting in a 2-2 deadlock, joined with Robertson, councilman Ed Scott and councilman Ed Palmer to approve the lease arrangement on March 27.
Roughly half of the residents in this city of 99,171 are municipal water district customers who will now become American Water customers. The other half get their water from the West Valley Water District.
City residents will yet have an opportunity to reject the rate increases by means of a mail vote to be conducted by the city. If more than 50 percent of the ratepayers return the mail-in ballots rejecting the increase, it will not go into effect.