Water and sewer rates are once again going up in San Luis Obispo. On June 14, the SLO City Council voted 3-2 to raise rates for city residents by 10 percent beginning July 1 and an additional 9 percent beginning July 1, 2012.
City staff say the continued upward swing in water fees is due to the Nacimiento water project. The city’s share of the cost is $80 million, and, city staff say, higher water rates are necessary to have what some are calling a “drought proof” water supply. According to Mayor Jan Marx, because of the Nacimiento water supply, SLO is in the best shape of any city in California to withstand a drought.
The council also voted 3-2 to raise sewer rates 7 percent July 1 and another 6 percent in 2012. Those rates are rising because the city will likely have to build a $63 million new sewer plant to put drinkable clean water into San Luis Creek to meet environmental requirements, according to city staff.
Councilmembers Kathy Smith and Dan Carpenter voted against both rate increases, saying the fees would be too high.
Smith said the continuously rising fees—water fees have jumped 121 percent in 10 years—are too much for many residents who subsist on Social Security.
“It doesn’t seem like a lot of money, but when you’re living on a fixed income and all of your basic services are going up, you have a real problem,” she said.
The city must pay $4.74 million per year to pay off the debt it took on to build the pipeline.
In what came as a surprise to city staff, residents have been using less water. Water fund officials told the council they think water use may have gone down because of weather patterns, conservation, and high vacancy rates.
City officials have said privately that water use is likely going down because rates are getting so high; water rates will probably continue to rise to compensate for residents using less water.
The council reviewed many of the city’s enterprise funds, which are supposed to operate independently from the general fund. What wasn’t mentioned at the meeting was the amount of money the city had in all its funds, plus its investment portfolio. According to a city memo, SLO had around $74 million in its coffers.
Much of that money had been allocated for future projects. The water fund has $15 million, but much of that will presumably be used for infrastructure improvements. Another $9 million in the parking fund is likely to be used toward building a $20 million parking structure city officials say will be necessary to replace parking lots lost to future development projects. About $10 million is kept for the city’s reserve, and much of the rest of the money is slated for paying off city debt and future capital investments, many of which have been put on hold to help balance the budget.