Facing a financial shortfall after years without a boost in rates, the Buellton City Council agreed to increase water and wastewater fees but favored a more compassionate approach with lower hikes.

During the five-hour meeting Thursday night, the City Council voted 3-1 to approve a proposal to implement increases more slowly over a longer period of time. Councilmember John Sanchez voted against the motion.

The proposed rate hikes came after the city last year hired a consultant to conduct a water and wastewater study on the two systems.

After hearing from residents, Councilmember Elysia Lewis favored a staff alternative she said balances compassion and responsibility by implementing the new rates in a more gradual way.

“I just want it to be clear it will cost residents more over the life of the rate plan that we’re choosing, but it does so in a way that’s more gentle,” Lewis said. 

A typical residential bill of $101.72 a month would go to $135.63 on Nov. 1 and end at $214.35 by 2030. The schedule calls for 6.5% the first year, not 12% as initially proposed.

The action established maximum rate hikes for five years, but specific increases for the future four years will be considered annually. 

Sanchez said he supported the increases initially suggested by the consultant.

“It’s responsible to do it. To put it off (until) later is going to be more expensive,” Sanchez said.

The first-round of the new rates will begin Nov. 1, not Aug. 1 as initially proposed, the council also decided.

They debated delaying implementation for 90 days, weighing the impact on the available reserves for the water and wastewater funds along with the impact on residents.

“I also do like the fact it gets us closer to January 1, which is when COLAs {cost of living adjustments} for Social Security do take effect, which would help a little bit of closing the gap for our residents who are on fixed income,” Mayor David Silva said.

The action established maximum rate increases for five years, but specific amounts for the future four years will be decided each time by the council. 

The council also directed staff to explore creating a rate assistance program to subsidize some bills for financially struggling residents through the city’s General Fund.

“And what that would look like, I don’t know, but it would be good if we had that presented to us,” Councilmember Hudson Hornick said. 

Staff will return with details of a possible subsidy program in late September.

Water and wastewater operations are enterprise funds that must support the operations plus future improvement projects.

Under Proposition 218 process, Buellton property owners could object to rate hikes, but the number of written protests fell short of the needed 50% plus one, city staff said.

Buellton last raised the utility rates seven years ago, necessitating efforts to catch up financially, according to the city’s consultant. The city’s wastewater fund has fallen into deficit while the water fund faces a shortfall without any rate increases.

Since becoming a city in 1992, Buellton only had conducted two rate studies in 1996 and 2016 before undertaking the most recent effort in 2024. Small increases for a couple of years followed the 2016 study.

Several residents spoke out against the drastic increases including asking the council to extend the start date beyond Aug. 1. 

“We need you guys to do better, be better, because this is hurting all of us. We elected you in. We need you to help us out. It’s just a really hard pill to swallow,” resident Troy Morehouse said.