Santa Margarita residents reject 32 percent increase in water rates

By the thinnest of margins, the residents of Santa Margarita on Tuesday rejected a 32 percent water rate increase.

County supervisors held a protest hearing for the rate increase proposed for the Santa Margarita County Service Area, which is operated by the county department of public works.

To block the increase, more than 50 percent of the town’s residential and commercial parcel owners, or at least 261 valid signatures, were needed.

In all, 262 valid signatures protesting the rate hike were received. More than 300 signatures were submitted, but the remainder were ruled invalid by the county Clerk-Recorder’s Office.

County officials said the 32 percent rate increase was needed to compensate for a drop in operating revenue as customers responded to the drought by cutting water use by 32 percent.

The vote is the first time in the county’s history that a utility service managed by the county has seen a rate increase rejected, said county Public Works Administrator Will Clemens.

Rate increases for service districts are governed by a law called Proposition 218 that was enacted by state voters in 1996.

Residents opposed to the increase went door-to-door gathering protest signatures in the days before Tuesday’s hearing and submitted them Monday afternoon.

The county Clerk-Recorder’s Office worked Monday afternoon and Tuesday morning to verify the validity of the submitted signatures. Signatures can be ruled invalid if they do not match county records for parcel ownership or residency.

“This is the community’s decision,” said Supervisor Debbie Arnold, whose district includes Santa Margarita.

The rate increase would have gone into effect after Oct. 15. The average monthly water rate would have jumped to $58.43 from $44.13.

The main reason for opposition to the rate hike was that it was proposed during a drought.

If the drought ends and residents begin using more water, the water district would see a large influx of money.

Arnold said the county has rules in place that prohibit special districts, such as the one in Santa Margarita, from collecting more money than it needs to operate.

However, Barbara Ahern of Santa Margarita, the only member of the public to speak at Tuesday’s hearing, was skeptical. She also lamented the fact that the community was being punished for doing its part to conserve water.

“I’ve never known any charges to go down,” she said. “And now we are being negatively rewarded for conserving water by having higher rates, and that is a psychologically negative thing to do.”

With the rate hike rejected, the county will now seek a loan to keep the water district functioning in the short term. The reserve fund for the water district is down to about $50,000, which will be exhausted before a new rate increase can be proposed.

County officials say they will start the rate increase process again; it is expected to take about three months and cost from $7,000 to $8,000.

Clemens said the first step will be to develop several alternative rate structures to be submitted to the Santa Margarita Area Advisory Council in October.

Once the advisory council selects the option it likes, Clemens will return to supervisors to begin the process of scheduling a new election.

Water bills are based on the amount of water used in order to encourage conservation, but the cost to operate the water system remains constant no matter how much water customers use, Clemens said.

The proposed rate structure placed the biggest cost increases on those who use the most water.

“We thought we had a right balance with our proposal, but apparently some people in the community disagreed,” Clemens said.

Supervisor Lynn Compton asked what would happen if the community continued to reject subsequent rate increase proposals. Clemens said the water district would eventually run out of money and not be able to continue to operate.

“They could always truck in their water, but I don’t want to go there now,” he said.

This story was originally published September 15, 2015 at 2:44 PM with the headline "Santa Margarita residents reject 32 percent increase in water rates."