Nipomo Mesa is set to consider pipeline cost

Some Nipomo Mesa residents could pay from $120 to $225 a year for 30 years to fund construction of a pipeline to bring water to the community from Santa Maria.

But many others could pay at least double that, depending on the size of their property and other factors.

The Nipomo Community Services District, which is leading efforts to form an assessment district to pay for the pipeline, has released updated cost estimates for residents who receive water from one of the four purveyors that will share the project’s costs.

District General Manager Michael LeBrun said the agency is on track to mail a ballot to residents in mid-March asking whether they will agree to levy a tax that would fund the pipeline’s estimated $25.9 million capital cost. The ballot period would be open until a May 9 hearing.

The proposed assessment district covers about 8,800 properties. In recent weeks, the Nipomo district mailed letters to their property owners, asking them to review information that will determine how much they’ll pay toward the pipeline — an amount that will vary widely depending on each property’s size, zoning and potential for any future development.

About 550 property owners in the Nipomo district, for example, have one home on a lot that’s smaller than a third of an acre. They would be assessed about $1,800 for their share of the pipeline cost, which could be paid in a lump sum or over 30 years.

Nearly 600 other property owners, however, own larger lots with two homes and would pay more than double that amount.

District officials say the pipeline is necessary to reduce the area’s dependency on its only source of water, an underground aquifer, and to prevent saltwater intrusion, the pollution of a freshwater aquifer by seawater creeping underground and moving inland.

But residents opposed to the proposal have argued that the services district is not telling the public about the project’s true cost and questioned whether the Santa Maria pipeline would be reliable in times of drought.

John Snyder, who maintains a website, www.nonewwiptax.com, dedicated to “preventing a useless tax in Nipomo,” is concerned that the district hasn’t provided residents enough information for them to understand and verify the assessment assigned to their properties.

“Two-thirds of the people probably haven’t even realized what’s going on,” said Snyder, who is not a part of the assessment district.

LeBrun said the district’s consultant, Kari Wagner of Wallace Group, has responded to 500 phone calls from residents, and estimated about 500 people attended recent workshops.

If the assessment district vote is successful, the Nipomo CSD will then seek to raise water rates to cover the costs of the deliveries from Santa Maria, at which time residents affected by the rate increase would have a chance to vote against it.

Construction of the pipeline would take 18 months, and the process to raise water rates would happen concurrently, LeBrun said.

If the assessment vote fails, the Nipomo board would look at other ways to pay for the pipeline, including increasing water rates.

Customers of the other water purveyors on the Mesa — Golden State Water Co., Rural Water Co. and Woodlands Mutual Water Co. — are included in the assessment district, but it will be up to the individual companies to raise rates to cover their share of the water costs.

A look at proposed assessments

These estimates represent what a property owner, who owns one residential unit on a parcel of less than 0.35 of an acre, would pay if the proposed assessment district is formed.

Those with larger parcels, additional residential units or parcels zoned for other uses could pay more. The cost varies depending on which purveyor supplies water to the property.

If the assessment vote passes, the Nipomo district, which is leading the project, would issue bonds to finance the project.

The annual payment estimate was calculated using a 7 percent interest rate, but district officials anticipate the actual rate would be lower, which would drop the annual cost to property owners.

If a property owner chose to pay the assessment in one lump sum (noted as cash payout below), that person would get a discount by avoiding bond-financing costs. The 30-year payment plan includes both bond financing costs and interest charges.

Water purveyor Proposed total assessment Cash payout 30-year annual payment*
Nipomo Community Services District $1,800 $1,500 $130
Woodlands Mutual Water Co. $2,700 $2,200 $225**
Rural Water Co. $1,400 $1,100 $120
Golden State Water Co. $840 $700 $75
Source: Nipomo Community Services District. * Includes bond financing and interest charges. ** District officials anticipate the annual cost being reduced to $150 a year if a loan is obtained from the U.S. Department of Agriculture.

Learn more: More information about the proposed assessment district and pipeline project is at www.ncsd.ca.gov. Property owners with questions about the letters they received should contact Kari Wagner of Wallace Group at 929-0411 or kariw@wallacegroup.us. Any corrections must be submitted by Feb. 16.