After 10 years without a rate increase, Napa Sanitation District wants to raise rates by 15 percent a year for the next three years to fund system improvements.

Rates for residential customers, now $274 per year, would rise $41 in 2006/07, $47 in 2007/08 and $54 in 2008/09 when the rate will be $416 a year.

The district needs significant amounts of new revenue to keep the system operating safely and efficiently, general manager Michael Abramson told the board of directors Thursday.

Several new board members, Napa Mayor Jill Techel and Napa Councilman Mark van Gorder, questioned why the district had gone a decade without raising rates, creating the need for such large increases.

Charles Gravett, a veteran member representing the public, said former management had never created a long-range financial plan.

"We had big reserves that gave everybody a relatively good sense of security," Gravett said. "We never had a master financial plan. No one knew what the future would bring."

When Abramson took over in October 2004, one of his first assignments was to assess needs for the next 10 years. He identified millions of dollars of essential projects, including replacement of old lines and pump stations, for which funding was not available.

Abramson gave the board half a dozen rate options, including a first-year hike of 38 percent that would have raised the residential rate by $104 next year.

Techel insisted on a multi-year series of rate increases. "We want to be forward thinking, but not try to fix (all) the mistakes of the past in one year," she said.

Van Gorder said a phased series of fee increases would minimize the impact on people on fixed incomes and tight budgets.

To keep rates closer in alignment with needs, rates after three years would go up annually at the rate of inflation.

The public will receive notice of the proposed rate increases in a mailer scheduled to be sent out next Friday to nearly 24,000 property owners in the greater Napa area, including Silverado Resort and the airport industrial parks.

A public hearing will be held Aug. 2 at 4 p.m. in the Community Room of the Napa City-County Library, 580 Coombs St.

Property owners can vote against the increase by submitting a written, signed protest containing their parcel number to the district at P.O. Box 2480, Napa 94559. Protests must be received by Aug. 2.

If a majority of property owners -- approximately 22,000 -- protest, the rate increase will not take effect, Abramson said.

The district expects to spend $7,000 preparing the mailer that argues the case for the rate increases, Abramson said. The district has hired Linda Scott, a local political campaign manager, and Martin Rauch, a specialist in sanitation district matters, to prepare the mailing.

New revenue will help fund some $13 million in system upgrades over the next three years, according to district staff.

Commercial and industrial customers generally pay more than residences, depending on the amount and quality of their effluent. The financial impact on these customers will be greater, Abramson said.

Abramson said the district had failed to prepare for the future by leaving rates flat for 10 years. Currently, only three sewer districts in Napa, Solano and Sonoma counties have lower rates than the Napa Sanitation District, while 26 districts have higher rates, he said.

Even with the new rate increases, Napa customers in three years will be paying about the average current rate of the 30 districts, according to district data.

Reviewing a draft of the mailer, directors suggested changes. Van Gorder said the brochure should emphasize public safety, not environmental regulations that contribute to added district costs.

"It sounds like we want to raise rates because we want to be friendly with the birds," van Gorder said. "The fact is, we have infrastructure that is borderline failing."

Staff noted that the rupture this spring of a sewer line near Silverado Trail was the second break in that line in four years. With new revenue, the district will replace the aging pipe.

"People want to trust their sanitary sewer system is maintained in a way that will not cause them problems," Techel said. "They don't want lines breaking and things like that."

"You cannot defer maintenance like you can streets and sidewalks," Gravett said. "If you do, the whole thing blows up."

Gravett may have been referring to Tuesday's election, when county voters rejected a half-cent sales tax to fund street maintenance and highway projects.

The revenue plan calls for rate increases of 15 percent, 14.9 percent and 14.9 percent over the next three years. On the first vote, the board's three elected members -- Techel, van Gorder and Supervisor Mark Luce -- voted yes while the two public members -- Gravett and Dennis Scherzinger -- voted no.

Gravett and Scherzinger preferred an initial increase of 20 percent to ensure that the district would have the funds to catch up on capital projects.

They later changed their votes so the board will speak with a unanimous voice.

Property owners pay their annual sewer fee as part of their property tax bill. Because the property tax can be paid in two installments, a low-income person would not have to come up with all of next year's $41 increase all at once, Techel said.

The district's current operating budget is $13.4 million, with capital projects pushing the total to $20 million. With higher rates, the district expects to ramp up spending on improvement projects next year when total spending will top $30 million. Spending will be closer to $22 million in following years.