Paso Robles set to OK water rate increase

Eager to establish a way to pay the city’s share of the recently completed Nacimiento Water Project, the Paso Robles City Council is expected to approve water rate increases Tuesday.

One of the five participants in San Luis Obispo County’s approximately $176 million project, Paso Robles is the last to establish a way to pay for its obligation.

It will be the council’s sixth attempt since 2007 to raise rates amid backlash from a protest group, a failed ballot measure and a lawsuit.

Other partners in the pipeline project, such as Atascadero and San Luis Obispo, raised their water rates without any protest.

If the rates Paso Robles presented in 2007 had been adopted, the city's water fund would have added $12.6 million, according to the city.

City officials say that figure represents $8.1 million that would have been collected plus $4.5 million the city says it has spent on litigation and consultant work needed to develop new rate proposals.

A water treatment plant to make the new lake water drinkable would have likely been built instead of being put on hold, city leaders say.

As a result, the city is using water fund reserves to make its first payments for water it can’t use yet. City leaders claim that fund will be depleted by 2014 if a rate increase is not approved.

Under the current proposed increase, rates would go to $2.50 from $1.32 per 748 gallons used. Rates would then increase incrementally in later years before reaching $4.40 per unit in 2015. The new rate schedule drops the $18 fixed fee that appears on bills now.

The proposed method is the same plan the council passed in May 2010 before Concerned Citizens for Paso Robles sued the city over the action.

The city says it needs $13 million a year to meet payments for the Nacimiento project. That’s more than double the annual revenue of $6.3 million the water fund receives under current rates.

If approved Tuesday, the new rate plan would appear on bills starting in January.

Concerned Citizens has long argued that the rate increases should be considered a special tax, requiring a two-thirds vote under state law, not a fee on a water bill.

But a San Luis Obispo Superior Court judge in October ruled in the lawsuit that the increased rates are not a special tax.

Judge Martin Tangeman also ruled that the mailer notifying the city’s 10,000 water customers last year didn’t adequately describe why the hikes were needed, which struck down that proposed increase.

The mailer process falls under Proposition 218 — the Right to Vote on Taxes Act approved by California voters in 1996 — which allows for public protest of various government levies. In February, the council approved new notices.

Concerned Citizens could continue its protest after Tuesday’s potential adoption, group spokesman John Borst said Friday. If so, it would do so after the council’s required second vote on the increases set for April 19, he said.

After the second vote, Concerned Citizens needs signatures representing 10 percent of ratepayers to file a petition drive to stop the rate increase, which it has succeeded with in the past.

In earlier proposed increases approved by the council, the group was not successful in stopping rates after the council’s first vote. To successfully stop the increase, state law requires objectors to present protests representing a majority of ratepayers.

Meeting Tuesday

The Paso Robles City Council meeting is planned for 7:30 p.m. at the City Hall/Library Conference Center, 1000 Spring St. Anyone with questions can call 237-3888 or email council@prcity.com.