The Hollister City Council on July 20 approved a resolution that will give low-income seniors a 25 percent discount for the first tear of city water services beginning Aug. 20. If all 323 accounts now included in the low-income water discount program take advantage of the rate, the city estimates the cost to the general fund to be less than $25,000 annually.
The city previously provided a senior discount rate for all tiers of its water service, subsidized by the general fund. However, recent legal interpretations of Proposition 218, which was approved by voters in 1996, say that a discount for all water service tiers cannot be subsidized by other rate payers. Prop. 218’s intent is to ensure that all taxes and most charges on property owners are subject to voter approval.
A San Jose Mercury News editorial in April 2015 said that a 4th District Court of Appeal ruling “held that since Proposition 218 prohibits charging more for a service than it costs to provide, the policy of charging higher rates to users of more water was unconstitutional. At least two-thirds of California water providers, including many in the Bay Area, use some form of tiered rates.”
The council’s approval of the resolution means that the city of Hollister will only subsidize the first tier of the water rate structure for eligible low-income seniors. “This change would encourage water conservation by not subsidizing the high-usage tiers,” said Administrative Services Manager Brett Miller, meaning that seniors who want to be eligible for the discount must limit their water usage.
The discount plan has the following eligibility rules. The customer must:
- Be at least 62.
- Prove current enrollment in telephone service under University Lifeline Telephone Service Rate and/or Pacific Gas and Electric service under the California Alternative Rate for Energy (C.A.R.E.)
- Must renew annually.
Miller said that there will be no additional financial impact to the current fiscal year budget, as the discount has already been included in the current-year plan.Â