Opinion

Thursday, Sep. 18, 2008

Editorial: Paso rate plan is fair and prudent

The city’s approach to easing residents’ pain for Nacimiento water project makes sense

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To the casual observer, it must appear that the city of Paso Robles is awash in indecision over water rates.

For more than a year, the city has been wrestling with how to pay its share of the Nacimiento Water Project. The city first proposed a flat increase that would have raised each customer’s monthly bill to $60. Ratepayers objected, and the city then turned to a usage-based rate structure that would have rewarded frugal water users with lower bills.

That, however, turned out to be no bargain either. Under that formula, the proposed rate increases would have brought the average customer’s bill to $65 next year, and to $125 in 2016.

We understand why residents would be upset. Paso Robles has historically enjoyed low water rates; in 2003, for example, water bills in Paso Robles averaged around $18 per month—one of the lowest rates in the state.

To go from that to $65 per month—with the specter of even higher increases ahead — would indeed be hard to swallow.

Now, the city is proposing yet another compromise, and it looks like a winner.

Instead of building a costly water treatment plant for Nacimiento water in a single step, the city is proposing to break the project into phases to be built over 12 years. Water storage tanks, pipelines and metering also would be spread out over time.

Here’s the beauty of the proposal: By building in stages, the city would avoid having to borrow millions of dollars to finance the upfront construction, saving ratepayers more than $40 million in interest payments.

That would allow the city to charge substantially lower rates: The average customer would pay $43 per month next year, instead of $65, and $77 in 2016, compared to $125 under the old proposal.

It’s true that the city would not be able to use its entire allotment of 4,000 acre feet of Nacimiento water under this plan. Initially, it would be able to treat only half that amount—2,000 acre feet—until building the second phase of the treatment plant roughly 10 years from now.

Given the national economic crisis and the slowdown in construction, that approach may wind up being the wisest course anyway.

We commend the Paso Robles city staff and council for its “if-at-first-you-don’t-succeed” persistence.

It took some time, but we believe the proposed compromise is fair to customers while allowing the much-needed Nacimiento project to move forward without jeopardizing the city’s general fund budget.