New proposal for water rate hike to be sent to Paso Robles residents

After a series of failed attempts to increase its water rates, the Paso Robles City Council on Tuesday night unanimously approved another proposed increase of the rates to pay for its share of new drinking water from Nacimiento Lake.

The planned increase adopted Tuesday is the same rate increase finalized in May 2010. The council had to vote on it a second time so that the city could provide more information to the public to comply with a ruling made in October by San Luis Obispo Superior Court Judge Martin Tangemen.

Tangeman ruled the city didn’t adequately describe why increased water rates were needed.

A final judgment on the ruling was issued Jan. 4. The council also had the option to appeal the ruling but did not.

Under voter-approved Proposition 218, increasing water rates involves a process that sets a public hearing date and establishes a protest process.

The council’s vote allows the city to mail new public notices to its 10,000 water customers early this month. Customers have 45 day to protest the rates. If a majority of customers send in protest votes, the increase cannot go forward.

The notices must better describe how the increase was calculated, according to the ruling. To comply with the court, the notices will include additional data and be modeled after similar notices used in other jurisdictions in order to improve reader comprehension.

Under the proposed increase, rates will go to $2.50 from $1.32 per 748 gallons used. Rates would then increase gradually in subsequent years before reaching $4.40 per unit in 2015. The new rate schedule drops the $18 fixed fee that appears on bills now.

Reissuing the notices delays increases to water bills until January 2012, instead of now.

The rate increases are needed to pay for the city’s portion of the $176 million Nacimiento Water Project and a water treatment plant.

The city says it needs $13 million a year to meet those commitments. That’s more than double the current annual revenue of $6.3 million under the current rates.

Without increased rates, the city’s water fund will go broke by 2014, and payments would then have to come from the city’s general fund to avoid deficit spending.

Five members of a Paso Robles-based citizens group that has actively fought proposals to raise municipal water rates filed a lawsuit against the city in May.

They claimed the city illegally adopted the rates because it should have referred to them as a special tax, which could only be passed with a two-thirds vote.

Tangeman ruled that the increases aren’t a special tax.

The petitioners — residents John Borst, William Taylor, Brooke Mayo, Teresa St. Clair and Thomas Rusch — are also asking the court for $333,837 in taxpayer money to cover their attorney fees. A judgment on that is expected in the coming weeks.