In order for Angels Camp to get federal stimulus money for upgrades to its wastewater treatment plant, ratepayers in the city are going to have to approve rate hikes that were implemented in 2006.

State-mandated improvements to the plant will include installing ultraviolet treatment capabilities, enabling discharge into Angels Creek in the event Holman Reservoir becomes too full. The project was initially going to funded with a $3 million loan and $1 million grant from the U.S. Department of Agriculture, but the city recently learned that it was eligible to receive $3.1 million from the American Recovery and Reinvestment Act. However, that money comes with some strings attached.

One of those strings is that the federal government is requiring the city to ask some homeowners to approve a rate increase from June 2006 that raised rates for residential meters to $39.96 per month.

The council approved the increase a month before the state Supreme Court decided a case regarding Proposition 218, passed by voters in 1996, which requires voter approval of some fee increases. In order to be in compliance, the feds said, it's up to those ratepayers affected by the '06 increase to give the OK two years after the fact.

The ratification does not require an election; instead property owners and people who pay sewer bills directly to the city have been notified of the proceedings and may protest the increase in writing. If more than 50 percent protest, the rates are not ratified and the federal stimulus money goes away. So far, according to City Clerk Mary Kelly, about 1,700 people have been notified and three have protested.

If more than 5 percent protest the rates, the city will have to embark on a two-year public education process, the details of which were not readily available.

The council held a workshop Tuesday to not only educate citizens about Proposition 218, but also to provide information about what the project will accomplish. Carol Woolf, chief plant operator, said the upgrades (now in the third phase) will include modifications to make control and documentation of flow rates more reliable, in addition to the UV capabilities. The plant will be able to hand .6 million gallons of flow in dry weather and more than 1 million in wet weather. The plant's pumps will also be upgraded.

The water is regulated under Title II, which requires filtration of water before it is discharged.

“It makes sense to go to UV,” Woolf said. “Your water quality improves.”

The city recently received a National Pollutant Discharge Elimination System, authorized by the clean water act, that allows the city to discharge into Angels Creek once the UV system is installed. When Mayor Jack Lynch brought up the fact that many residents are concerned about contamination of the creek, Woolf emphasized that discharge will only happen when Holman Reservoir has only 20 million gallons of storage left, in which case the water would be heavily tested to meet strict criteria for discharge into the creek. Such discharge would only be permitted during the wet-weather season, from the middle of November to the beginning of April.

“We are not allowed to discharge into the creek on a regular basis,” Woolf said, adding that in her nine years working for the city she has only seen the plant meeting discharge criteria once. The city will continue to discharge onto land.

City Engineer Gary Ghio took over the dollars-and-cents portion of the workshop, outlining what the costs will be to the city depending on the outcome of the Proposition 218 proceedings.

If the 2006 rates increase is ratified, the city will receive a $3,086,400 grant from the state's clean water revolving fund, and will have to pay back a $286,400 loan at 1 percent interest for 20 years. That amounts to an annual cost of $15,959 to the city and a total cost of $319,185. Additionally, if the city receives stimulus money it will be subject to “Buy American” restrictions on products used in the project.

If more than 50 percent of ratepayers protest the '06 increase, the city will continue with its original plan to obtain a $3 million USDA loan, which will be paid back at 4.25 percent interest for 40 years. And although the money does include a $1 million, grant, it will still come at an annual cost of $156,103 to the city and a total of $6,244,130. In addition, the city can't access the grant money until all of the loan funds have been disbursed.

Soaring water and sewer rates in Angels Camp have long been a point of contention at City Council meetings, which residents decrying the high rates they pay. When researching the USDA loan, city staff was able to reorganize funding to ensure it can pay back the loan without putting more burden on ratepayers.

“The rates will not go up at all,” Ghio said, but he and the council emphasized that not ratifying the 2006 rates will still result in a huge burden to the city, and that they were ap-proved after a public hearing.

The public hearing for the Proposition 218 proceedings will be held during the City Council's Nov. 17 meeting, at 6 p.m. in the Angels Firehouse, 1404 Vallecito Road. While protests can be mailed to the city in writing now, they may also be made at the hearing.

City Attorney Richard Matranga had grim news for the council when asked what happens if the rates are not ratified.

“If there's more than 50 percent, excuse my vernacular, but we can kiss the grant goodbye.”

Contact Krissi Krob at kkrob@calaverasenterprise.com.