Facing a revenue shortfall, the Los Osos Community Services District (LOCSD) is gearing up to raise its water rates—again.
On April 11, the LOCSD board of directors directed district staff to set a June 15 hearing and issue public notice per Proposition 218 (which essentially requires public notice and approval for rate changes) to pave the way for a new, three-year water rate structure.
Under the proposed new rate structure, a typical LOCSD water bill would jump 32 percent on July 1, from $107 to $141 based on 1,200 cubic feet of water consumption. Then, in the ensuing two years, the bills would increase to $158 and $176, respectively. Those rates compare to a $164 bill with Golden State Water Company, another purveyor in Los Osos, assuming the same amount of water usage, according to a district staff report.
The LOCSD says it simply needs more funds because Los Osos water purveyors are on the hook for completing several capital projects under the court-approved Los Osos Basin Management Plan. The plan’s purpose is to stabilize the Los Osos Valley Groundwater Basin, which is threatened by nitrate contamination and seawater intrusion. The LOCSD needs more revenue to jump-start the projects. Those include drilling two new wells on the east side of town, away from the coast where seawater is leaking in.
“Those can’t be delayed any further; they need to proceed,” said Rob Miller, a Wallace Group engineer who contracts with the LOCSD. “Seawater intrusion continues to advance [into the basin].”
The LOCSD last hiked its water rates in 2014, but customers have conserved so much water since then that the revenue projections at the time turned out to be severe underestimates. Water sales have decreased by 30 percent since 2013, and the district missed its revenue targets by about $300,000, according to the staff report.