Los Osos water rates could jump 65 percent by 2020

One of the signature bear statues that greet visitors at they enter Los Osos.
One of the signature bear statues that greet visitors at they enter Los Osos.

Customers of the Los Osos Community Services District are being asked to pay significantly more for their water under a proposed phased plan that raises rates by 32 percent in 2017-18 and tops out with a 65 percent increase by 2019-20.

The proposal is designed to help pay for new wells, a nitrate removal facility and other infrastructure to manage the groundwater supply to prevent overpumping and seawater intrusion.

Under the proposed rate increase — unanimously approved by the district’s Board of Directors on Tuesday — a household using 150 gallons of water per day now pays $107 bimonthly. That bill would increase to $141 in 2017-18, then $158 in 2018-19 and $176 in 2019-20.

The proposed rate increase is subject to Proposition 218, which allows ratepayers to protest the proposal. A successful protest would require more than 50 percent of ratepayers to object to the proposed hikes.

Customers are being provided with 45 days’ notice to contest the rate increases before the board is expected to hold a public hearing to adopt the rates in June. If adopted, the rates would take effect July 1.

Jon-Erik Storm, the board’s president, said the district has taken a conservative approach to upgrading its infrastructure needs.

But because the groundwater basin has been threatened with saltwater intrusion, and conservation measures already are in place to help preserve the district’s only water supply, more work needs to be done to ensure a healthy resource for the community, Storm said.

“Our rate increases will enable use to pay for as much infrastructure as we can without debt financing,” Storm said. “Everything going into our basin plan is paid for by ratepayers. We don’t have the benefit of a bailout from the county as other districts do, such as in North County. We voted to pay our own way.”

The district’s proposed new rates would provide net revenues of $500,000 in the first year, $700,000 in the second year and $900,000 by 2019-20.

Because of water conservation efforts in recent years and decreased water sales, the district has fallen short of its planned revenue target projected in a 2014 water study by about $300,000. The shortfall has hindered the district’s ability to complete anticipated capital projects.

Storm said that to make the basin sustainable through projects such as new wells, a nitrate removal system and updated aquifer monitoring studies, it “takes money, and we want to do it with as little debt financing as possible.”

As part of an agreement resulting from a lawsuit, the district is collaborating with Golden State Water Co., the San Luis Obispo County and S&T Mutual Water Co. — all of which draw water from the basin — to ensure a sustainable water supply.

“We’re all behind this decision, but that doesn’t mean we take this lightly,” Storm said. “Some of our residents live on a fixed income and the cost of living here is high. But compared with many other water purveyors, we’re well within the average. We’re doing this with very good reason, to make the groundwater basin sustainable.”

In addition to the revenues from proposed new rates, the district also voted to increase its administrative expenditures applicable to its Water Fund from about 62 percent to 80 percent.

Storm said that initial tests of the basin’s upper aquifer have shown a reduced rate of nitrates, which he said likely is attributable to the new Los Osos wastewater treatment system that has diverted the community from reliance on septic systems that are believed to have polluted the basin.