Round 2 of higher water and sewer rates in Cambria

It’s the second time in less than a year the district has proposed raising fees to offset water and sewer deficits

By Kathe Tanner

Cambria officials are considering a new budget that covers deficits in the town’s water and sewer departments with two rate increases in the next 14 months.

The Cambria Community Services District proposed raising rates by 12 percent Sept. 1 and by 14 percent July 1, 2009, for a cumulative jump of nearly 28 percent. Rates would go up by the same amount for water and sewer services, and for residential, business and vacant lot owners.

Water and sewer revenues would increase by $345,284 in the upcoming fiscal year and $955,745 the year after, or by 9 percent and 21 percent, respectively. Total expenditures for the two departments in the proposed two-year budget would be $3.6 million in the upcoming fiscal year and $4.2 million the next.

The district board will discuss the budget — including the rate increases— at its meeting Tuesday.

The proposal could be revised before another hearing set for May 22. The district’s schedule calls for rate increase notification letters to be sent May 27, followed by a hearing July 14 and final adoption July 24.

The district says it needs to raise rates so that the water and sewer departments will be self-sustaining and to pay for overdue maintenance and capital projects.

The increases also would stockpile about six months’ worth of reserve funds, including 60 days worth of operating capital.

Direction of money flow

The rate increases wouldn’t pay to build a seawater desalination plant—a project services district officials have long considered as a fix to the town’s chronic water shortage.

But the draft budget includes money so that the district can continue trying to get permission to install temporary wells and perform tests near the mouth of San Simeon Creek. Those tests would help find out whether that area would provide enough water to supply the desalination plant.

Most of the money to build the planned desalination plant is expected to come from federal grants.

The proposed rate increases also would not:

• help pay for a proposed Build-Out Reduction Plan to buy up vacant lots and thereby reduce future water demand;

• pay back money taken from the district’s general fund for water and sewage treatment operations;

•fund most of the capital projects included in the district’s “goals and objectives” document adopted earlier this year; or

• pay for increases in staffing levels or benefits.

This is the second time in less than a year that the district has tried to significantly raise rates. Last year, many Cambria residents deemed the district’s first proposal too drastic.

The district had proposed increasing water department revenue by 98 percent and sewer department revenue by 111 percent over five years.

It was stopped when a majority of district ratepayers submitted letters opposing it.