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Morro Bay’s new sewer project is a go — and residents will see fees increase next year

Morro Bay residents and businesses will start paying $41 more per month in water and sewer surcharges beginning July 1 of next year to pay for the city’s long-needed new water reclamation facility.

Though the increase means the average single family home will pay about $191 per month for water and sewer services, city officials say a number of still-up-in-the-air factors could bring that figure down by July.

The city council on Tuesday unanimously approved the new surcharges, which were recommended in June by a four-member commission appointed by the city, after written opposition to the rates by affected residents failed to pass a majority.

Tuesday’s meeting included a public hearing required under California’s Proposition 218, which voters approved in 1996 that requires a 50 percent plus one majority of affected city residents and property owners to block an assessment or property-related fee proposed by a local government.

The hearing came after the council on July 10 reviewed the proposed surcharges and scheduled the Prop 218 hearing for last month; due to an error in the original notification, the hearing was pushed back to Tuesday.

According to a staff report, the city hosted a total of 10 office-hour periods of between three to four hours to answer questions from residents throughout the Prop 218 process.

The city says it sent notices to affected property owners in July that contained descriptions of the project and surcharges. The city collected petitions via mail and in person at city hall and stored them in a sealed box in the clerk’s office. Four people among support and opposition committees were present when the raw count was taken Tuesday, according to city staff.

Ultimately, the city received 2,158 written protests by the deadline Tuesday — short of the 2,794 needed for a majority plus one. City Manager Scott Collins said the 2,158 protests have not been verified to confirm they are valid and filed within requirements of the law because they didn’t meet the 50 percent plus one threshold.

At the beginning of Tuesday’s meeting, opponents of the surcharges delivered another batch of what was said to be about 1,000 more protests, but the council unanimously voted not to accept them because they were undated and otherwise didn’t meet the requirements for acceptance.

Councilman Red Davis said the bundle of protests were submitted at the last minute by a resident who was spreading misinformation about monthly increases of hundreds or dollars to residents and property values being cut in half.

“I believe the timing of tonight’s submission was intended to be disruptive,” Davis said.

Councilman John Headding, echoing Davis, also said there had been ample time to submit valid protests.

“No matter what decision we make tonight, there’s still going to be a fractured community,” Headding said.

With a local funding structure in place, city staff are now gunning to meet a series of deadlines for environmental review to secure low-interest government loans for the reclamation facility project, expected to ring in at about $126 million and replace the city’s aging wastewater treatment plant.

Collins said Wednesday that additional factors — such as savings identified in a recently implemented monthly Finance Department review of the sewer and water fund, as well as a newly identified low-interest state loan for the overall project — could allow the city to decrease the new surcharges.

After nearly five years of juggling different sites for the new water reclamation facility, the council in September 2017 selected roughly 15 acres of unincorporated San Luis Obispo County property near the intersection of South Bay Boulevard and Highway 1 over less expensive options closer to the ocean.

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Matt Fountain: 781-7909, @mattfountain1
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