One might think Monday night's agenda for the Jackson City Council meeting was pretty benign - updates, appointments and a draft budget. Money changed that quickly.

Barely more than a couple of minutes into the meeting, during the public comment period, resident Bill Condrashoff asked whether New Faze, developers of the now-dormant Jackson Hills project, owed the city any money.

"Yes," answered City Manager Mike Daly. "Off the top of my head, about $75,000."

The debt is from city financing of work on required studies related to the project, which was supposed to be repaid by the developer some months ago. Daly said that proper steps toward collection are ongoing.

Also during public comment, Jackson native Pat Holland took the microphone. "I was born here in 1943," Holland began. "You (the city council) have an opportunity to change Jackson." He spoke of the vacant Safeway and Prospect Motors buildings, and of the Main Street property owners.

Holland waxed eloquent for a while, until Mayor Rosalie Pryor Escamilla reminded him of the 5-minute time limit for public comment. "This is on the agenda every meeting," she said. "Tonight it's agenda item No. 9. It would be good if you could hold your thoughts and come back later."

Vice Mayor Connie Gonsalves invited Holland to join the city's economic development committee.

Water and sewer rates dominated the middle of the meeting. Daly introduced the topic and the Water/Sewer Rate Committee primary analyst of Amador Water Agency reports, Condrashoff.

According to Daly's memorandum to the city council, "After several requests for information (from the AWA), the committee has come to an agreement that the city council and committee members should approach the AWA Board of Directors to clarify some of the outstanding issues."

Condrashoff predicted that a shortfall would result from the AWA's Plymouth Pipeline Project and its announced intention to collect participation fees of $2,500 for each new hook-up.

By Condrashoff's calculations, the fee should be more in the $7,500 range. "This shortfall," he said, "will be $2.5 million, which will be borne by existing ratepayers."

Condrashoff went on to question agency figures. "The pipeline math is funny," he said. "The agency says they can serve 16,000 more customers with the second half of the transmission pipeline water, while the first half only serves 8,000."

Councilman Wayne Garibaldi brought the discussion back to water and sewer rates. "The sentiment of the committee is that we have to pass along the rate increase," he said. "We may need to hire a consultant to see what the options are."

Garibaldi was referring to the 22 percent increase in the wholesale water rates imposed on Jackson by the AWA, effective Aug. 1, 2007. This increase will be followed by additional 12 percent increases on July 1, 2008 and July 1, 2009.

The city of Jackson has not yet passed the first rate increase on to its retail water customers and has no solid plan for passing on the anticipated future increases.

"We should recommend a rate increase with a sunset clause," Pryor Escamilla suggested.

Pryor Escamilla then turned her attention to the conflict between the city and AWA. "I think the city council should take these issues to the water agency board," she said.

Garibaldi backed the mayor. "I see no way to avoid being subjected to these increases unless we take a more aggressive stance," he said.

"We will be working on getting a majority of the council to attend an AWA meeting," promised Daly.

AWA District 1 Director Madonna Wiebold invited the council and, with a turn and a wave to the residents, everyone else in attendance to come to an AWA meeting, announcing June 26 and July 10 as the dates of the next two meetings.

A report on progress by the Jackson Economic Development Committee included details of a visit to the city of Sonora by the finance subcommittee members: Garibaldi, Daly and Amador Community Foundation Director Shannon Lowery.

Sonora has had tremendous success with its redevelopment agency, which was formed in the early 1990s and now generates over $400,000 per year for city projects.

The report also mentioned the design committee's "most visible work," a model of a street light and pole, which prompted Pat Holland to exclaim, "That's a real nice street light, but no stores are open downtown at night."

Daly presented a draft of the city budget for the Fiscal Year 2008-09, one unfortunate highlight of which is the fuel cost increase, up 61 percent over last year's budget.

"We are going back to a one-year budget from two-year because of the uncertainties," Daly told the council.

Sales tax revenue declined by 33 percent this past fiscal year. Property tax revenue is still expected to rise slightly, despite slowness in the real estate business.

The city is planning for a substantial reduction in its fund balances during the coming year, but council members claim that new strategies and implementation measures provided by the economic development committee may lead to economic recovery.

Margot McIntire was voted in to replace departing member Jean Mueller-Campbell on the Jackson Cemetery Committee. Committee member Walt Hoeser will continue to serve.

A special meeting of the city council will be held next Monday, June 29, to discuss the choice between applicants Jason Bergen and Darek Selman for the Jackson Planning Commission seat vacated by Terri Works.