Some Oceano residents are questioning a proposal that Oceano Community Service District officials developed to hike water and sewer rates over the next four years.
Thirty-five of the district’s 2,121 residential and commercial customers have submitted a formal protest on the rate increases — which, if approved at a Feb. 23 meeting, would be effective in March.
District officials say it is necessary to increase water and sewer rates, both of which have not been raised in more than a decade, to repay reserves and meet operating expenses, projected to be about $1 million for water expenses and $309,000 for sewer expenses this year.
The new complaints from homeowners follow on the heels of criticism from several people about high turnover — the district has had five general managers in four years — and concerns of mismanagement of district funds. The district, for example, has not had an audit in two years, though one is being completed now by San Luis Obispo-based accounting firm Glenn, Burdette, Phillips & Bryson.
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Several residents have raised concern over the way the district has presented the rate increases in a notice mailed to all ratepayers in December in English — though, according to the U.S. Census, about 33 percent of Oceano’s population speaks Spanish at home.
They have also criticized the district for its explanation of the basis for the rate hikes — or lack thereof.
Under voter-approved Proposition 218, government agencies are required to notify the public of fee increases and provide the reason for the proposed fee and the basis upon which it was calculated.
The proposition also allows the public to keep increases from taking effect if a majority of those affected protest the rates in a set period of time.
One required section of the notice sent to district customers Dec. 18 — titled “basis for the proposed water and sewer rate increases” — was blank.
“My main objection is we were not given the basis,” said homeowner Nell Langford, who protested the increases via e-mail but was not sure if her signature would be accepted. “They’re required by law to give (us) the information.”
Oceano resident Cathy Young is also frustrated by the district’s proposal.
“I think they’ve squandered our money,” she said, noting that the district recently discarded a $30,000 water and sewer rate study commissioned from a Newport Beach-based company. Board members said they were not satisfied with the proposed rates and instead decided to develop their own proposal.
The Tuckfield & Associates study noted that the district had borrowed about $1.1 million from its restricted reserve funds as of June 30 to meet operating deficits.
When asked about the basis for the rate hikes, Oceano General Manager Raffaele Montemurro said additional information would be sent out to district customers: a look at the rate increases through 2014-15 for a few different consumption levels and the basis for the increase.
“We’re trying to come up with something politically correct to put in there,” Montemurro said. “We want to make it simple so it’s easy to understand. We haven’t had water rate increases since 1997. The expenses have exceeded the revenue.”
The district board held a special meeting Monday to consider hiring a new attorney — its previous attorney, Alex Simas, resigned as of Dec. 31 — but did not make a decision.
Montemurro said he hopes to have a new attorney hired to review the language in the updated notice that will be sent to district customers. He said customers who have already submitted protests would not have to do so again.
Proposed increases: Public hearing on Feb. 23
The rate increases for district customers — about 1,985 of whom are residential customers — vary depending on the type of customer and how much water is used.
For a residential customer using 20 units of water, a bimonthly bill would increase under the proposal from $78.24 to $92.04, and again to $99 in 2014-15. A unit of water is 100 cubic feet of water. Sewer customers would see their bill increase to $17.27 from $9.25.
The board approved the proposal at its Dec. 8 meeting; a notice of proposed increases was mailed to district residential and commercial customers Dec. 17.
A public hearing was originally set for Feb. 9 but has been moved to Feb. 23, Oceano General Manager Raffaele Montemurro said, to allow the required 45-day period for ratepayers to protest.
The notice was written in English; Montemurro said the district has two Spanish-speaking employees on staff who could answer questions if needed.
While the district board has not raised rates since the late 1990s, Oceano ratepayers have seen charges on their water and sewer bills rise because of an increased fee added in 2006 related to upgrades at Lopez Dam and the Lopez Water Treatment Plant.
Also, Oceano residents have seen an increase in fixed charges from the South San Luis Obispo County Sanitation District. Both charges are added to customers’ bimonthly bills.
The sanitation district fee has increased to $14.86 per month as of May 1 from $6.50 a month in 2006, said John Wallace, Oceano’s engineer and the sanitation district’s administrator.
It was the first increase the sanitation district had enacted in at least 15 years, he said.
Meanwhile, the district is moving forward with negotiations to possibly sell water to two separate developers of projects that could be annexed into the city of Pismo Beach — two deals that could net the district $1.5 million from the developers, not including an annual rate charge.
The board on Dec. 8 directed Montemurro to negotiate the sale of 300 acre-feet of state water with the two developers of projects: the stalled Los Robles del Mar development and the Price Canyon proposal — the latter of which could add hundreds of homes, hotel rooms and a golf course to about 1,700 acres north of Pismo Beach along Price Canyon Road.
District officials have said proceeds from the sales could be used to pay for needed capital improvements, such as waterline replacement projects, and to repay more than $1.1 million the district borrowed to meet annual operating deficits.
Reach Cynthia Lambert at 781-7929. Stay updated by following @SouthCountyBeat on Twitter.