Cambria moves to raise rates to pay cost of emergency water supply project

District also needs other infrastructure improvements, but directors keep focus on emergency project for now

ktanner@thetribunenews.comJune 5, 2014 

A crew works on drilling a monitoring well on San Simeon Creek Road on Thursday, May 22. The well is between an existing well field the district uses for the Cambria water supply and the site where an injection well will be drilled starting May 27.

PHOTO BY BOB GRESENS — Courtesy of Cambria Community Services District

The cost of water will rise soon in Cambria unless a majority of ratepayers object by July 24. A typical residential user would pay an additional $18.50 per month when the emergency water supply system the increase is intended to pay for is not in operation, and about $30.50 per month when it is — if the ratepayer has not decreased their usage, district consultants estimate.

If customers cut their usage by 20 percent from historic averages, less than what they already have, the estimated increase would amount to $9.45 when the plant is not in operation and $18.45 per month when it is.

The increases would pay for an emergency water supply project that the Cambria Community Services District currently expects to have online this fall. District customers will be notified by mail that their water rates are to go up starting Sept. 1. 

District directors unanimously approved the rate-hike process May 29.

The rate-increase notices — which staffers expect to mail Friday, June 6 to 3,945 current customers — also include information on how ratepayers can formally protest the rate hikes. That’s required under the state’s Proposition 218 law that says ratepayers must have an opportunity to protest rate hikes. If 50 percent or more protest, the increases would not go into effect. 

By law, the notices must be mailed 45 days before the public hearing at which the board is to vote on the increases, expected to be July 24. 

The total cost for the plant won’t be known until bids come in. The most recent estimate is that it would cost as much as $8.8 million, with contracts to include a 20 percent contingency for unexpected expenses, according to figures discussed at the special board meeting. The district is seeking a $3.75 million grant to reduce the costs borne by ratepayers, which directors pledge would make the rate increases smaller. 

Customers who use more water will pay more per unit in a three-tiered structure designed to discourage water use beyond the norm.

After two hours of discussion May 29, directors selected an alternative that includes escalating increases ranging from $1.50 to $4.50 per unit for the water-quantity charges. Commercial and other rates would be based on meter size.

Directors may consider provisions later that would give large families a break on the water-use charges, something requested by John MacKinnon. He noted that “there are a lot of large families here,” many of which “barely scrape by.” He objected to the district “charging them three times as much just because they have kids … I don’t think it’s fair.” MacKinnon said his research in other districts shows they have allowances for big family units.

According to the notice, a typical single-family home that normally uses 10 units every two months (approximately 100 gallons per day) currently pays a bi-monthly water bill of $48.02 for ongoing water service.

With the additional charges for the emergency water project, and without any reduction in water use, that total bi-monthly water bill could increase to a maximum of $85.02 when the district isn’t using the emergency water supply, and up to $109.02 when the plant is operating, which is restricted to periods of drought. 

However, with a 20 percent reduction in water use, to eight units per bi-monthly period, that $48.02 bill now would increase to a maximum of $66.92 when the emergency plant isn’t operating and $84.92 when the plant is online. 

The increase covers capital costs to get the brackish-water treatment plant online and providing water to the community, plus approximately $50,000 per year to maintain the plant when it’s idle. Capital costs include plant design, permits, installation and everything else that would get the project to the point of flipping on the switch and pumping the treated water into Cambria pipes. The increase also includes repaying the approximately $2.1 million the district has allocated or already paid out of reserve funds toward project work that’s complete or in progress.

However, the increases don’t include hiring extra personnel to man the new facility. General Manager Jerry Gruber said he hopes current personnel will cross-train so they can run and maintain the plant. Existing water sources would be offline while the plant is running, and he doesn’t want to add two more fulltime employees, which, including benefits, could add a quarter million dollars to each year’s budget. 

The emergency permit from the county only allows the district to operate the plant after a Stage 3 water emergency has been declared. Stage 3 is the most severe water-shortage declaration the district can issue; Cambria has been in that stage since Jan. 30.

Although the frequently water-short community has a history of conserving water, recent water use has been dramatically lower, with usage in the March-April 2014 billing period about 38 percent lower than in the same period of 2013. April 2014 usage was the lowest on record since the summary table began in 1988, with consumers using about 24 acre feet less in April this year, compared to last. 

While water use is expected to increase once the emergency source goes online and/or there’s sufficient rain to replenish ground-water aquifers that are the district’s historic sources, officials expect consumers will continue to conserve more than they had been before the drought, estimating use will be about 20 percent lower than pre-drought averages. 

The district is seeking grant funds to help offset the rate hikes. One state drought-emergency grant being sought could be for as much as $3.75 million. Directors pledged May 29 that should one or more grants come through, they’d immediately lower the rate increases.

But by law, the district has to present the worst case scenario in the notices. In this case, that includes the total expected cost of the plant, and the highest increases that could be applied. 

The current rate increase only covers costs for the emergency supply project. The board could consider implementing soon another rate hike to bring water and wastewater departments back into the black, according to details shared during several recent special and regular meetings of the district’s Board of Directors. 

The district hasn’t had a rate increase in about five years, and aging infrastructure needs lots of repairs or replacement, according to staff. The water and wastewater departments are supposed to be self supporting, but haven’t been for some time. The district’s general fund has been keeping them afloat, a trend that cannot continue, according to consultants, especially if the district is to qualify for financing for the emergency water supply.

The emergency water project plant would be a permanent installation for temporary use during officially declared droughts. 

The plan includes three wells on the district’s San Simeon Creek Road property, one from which brackish water would be drawn, one into which the treated water from the plant would be injected and a smaller well for monitoring the flow from one area to the other. The treated water eventually would spread toward the district’s supply wells, from which it is sent to in-town holding tanks and then to customers’ taps.

Water treatments in the 250-acre-feet-per-year plant are to include microfiltration, reverse osmosis (desalination) filtration, advanced oxidation and disinfection. Brine remaining from the process would evaporate in a pond that would be emptied periodically using a small tractor/loader.

Some of the treated water would flow into riparian and aquatic habitat areas of San Simeon Creek, helping to enhance the environment.

Follow Kathe Tanner on Twitter at @CambriaReporter.

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