Along with the cooler weather came cooler tempers at Tuesday night’s Colfax City Council special session.

Faced with the cold hard reality of a sewer rate protest that backfired into potentially costing property owners and the city millions of dollars, both the council and the about two dozen citizens in attendance got down to the serious – and for once, cooperative – business of deciding what to do next.

Additionally, the council directed staff to put some finishing touches on a balanced city budget that will be formally adopted after a final public hearing on Sept. 23.

Last week, the State Water Resources Control Board froze all of Colfax’s grants and loans for construction of its wastewater treatment plant (WWTP) and sewage collection system.

The board took the action because a successful Proposition 218 protest earlier this summer blocked proposed increases to the city’s sewer fees.

Without the increase in the sewer rates, the state board determined Colfax would not be able to repay the multimillion-dollar loans from the State Revolving Fund. Not only would Colfax have to pay back a staggering debt – and a $2 million grant – but the city would also shortly face hundreds of thousands of dollars in fines and penalties for failure to meet wastewater quality standards in time.

The only hope the city has of getting those funds unfrozen (and avoid massive fines) is to propose another sewer rate increase and hope it’s not defeated a second time.

Time was of the essence Tuesday night, because city staff had to put together a formal rate increase proposal for the city council to approve on Tuesday, Sept. 9.

With a new rate increase proposal approved by the council, the city can then take the new proposed rate to the State Water Resources Control Board’s Sept. 16 meeting in Sacramento.

The hope is the board will release funds to finish the construction of the city’s new wastewater treatment plant, which is scheduled for completion by Nov. 1.

The plant must be operational and online by January – or the city will be fined for failing to meet its mandated deadline.

However, the board may withhold funds until they see if the second rate increase is actually accepted by Colfax property owners.

Because of the strict procedures required by Proposition 218, the earliest such a rate could be approved – if it is approved – would be mid-November.

Under the provisions of Proposition 218, property owners must be given the opportunity to protest or vote down any proposed tax or fee increase. A majority protest, like the one this summer, can defeat any such increase.

Although many of the rate protest leaders attended Tuesday’s special session, they did not clearly indicate whether they would attempt a second rate protest.

After a long and complex financial discussion over how the WWTP and sewage collection system fees could be imposed at the lowest financial burden to ratepayers, the council voted to propose increased rates again.

The council unanimously agreed to propose a base rate of $87 per month (up from the current $60) starting Jan. 1, 2009. That rate would escalate to $96.46 by fiscal year 2012-13.

After two votes, the first of which was deadlocked 2-2, the council unanimously approved a combined inflow-and-infiltration (I&I) and lift station rate of $12.20 per month with no escalator clause – for now.

Although the two proposed rates were not exactly what she and her staff recommended, City Manager Joan Phillipe told the Record she felt the water board would take the proposed rates seriously.

After the vote, Phillipe announced the non-profit Rural Community Assistance Corporation (RCAC) would provide free technical assistance in educating ratepayers and organizing the Proposition 218 rate increase notification and vote.

The information that the non-profit corporation was getting involved seemed to be a relief to many in the audience.

One of the most strident criticisms the rate protesters raised earlier this summer was that they felt city staff and the council had bungled the proposed rate increase and had failed to educate the public properly.