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SLO considers water rate hike

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Use less water, pay more for it; that’s the tragic logic many California communities have reckoned with during the ongoing, record-setting drought.

As water customers decrease their use, partly in response to mandated drought conservation measures, the monthly bill payments have also decreased. That presents a challenge for the utilities that supply the water, because the cost to operate and finance the infrastructure necessary to treat and deliver water—and then take away and treat the sewage—remains the same, even when less water is being used.

Now, San Luis Obispo is preparing to follow several other local communities and raise water and sewer rates in order to stay afloat financially. To stabilize a decrease in revenue—San Luis Obispo’s water fund revenue declined by $1 million in the last year because of citywide water conservation—the City Council will consider a rate hike at its June 16 meeting. The city expected revenue to waver a little after Gov. Jerry Brown asked Californians to voluntarily curb use by 20 percent in 2014. The extent to which people in SLO would conserve, however, was underestimated, said Utilities Director Carrie Mattingly.

“It’s something that all the other agencies in California are experiencing right now,” Mattingly said. “We underestimated the power of the governor’s message.”

Now, with more conservation mandates coming from the top, the city must balance its budget and brace for more.

“All we’re trying to do is break even; we’re not trying to make any money on this,” Mattingly said. “We don’t pay for the water itself, we pay to get the water to customers.”

The city sent out mailers detailing the reasons for the upcoming rate increases, giving customers the chance to protest the increase. A simple majority of customers can formally protest and block the rate increases. Of the roughly 15,000 water and sewage accounts, a little more than 600 written protests were submitted for each rate increase as of June 9.

Both a gradual rate increase over the next two years and a drought surcharge, intended to make up the difference left from the declined revenues, are proposed. If it starts raining, and the drought eases up or ends, Mattingly can reduce or do away with that charge.

Currently, each customer has a monthly base fee of $5.28, with no drought surcharge, and customers pay $6.92 per unit for the first eight units and $8.65 per each additional unit.

If approved, the monthly base rate will increase to $7.63 on July 1 with an additional 37-cent drought surcharge and will increase again in July 2016 to $9.98 with a 74-cent drought surcharge. Per-unit rates (one unit is 748 gallons) won’t increase, but customers will pay a drought surcharge per unit. A 98-cent per unit drought surcharge will be added to the bills for the first eight units, with a $1.23 per unit charge for each additional unit. That surcharge will increase again in July 2016 to $1.10 and $1.37, respectfully.

The sewer rate base fee and per unit fee are also set to increase, with a 4.6 percent bump starting July 1, and an additional 3 percent bump as of July 1, 2016.

What will that look like for a household, all said and done? Those that use three units a month currently pay $61.61, and bills will increase to $69.12 for the next year, and increase again in July 2016 to $73.41. For those using 12 units, bills will increase from $151.81 to $170.43, and then to $176.48 in July 2016, according to the city’s mailer.

-- Melody DeMeritt - former city council member, Morro Bay

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