Los Osos CSD board hires firm to conduct water rate study

A Berkeley-based public financing firm has been hired by the Los Osos Community Services District to conduct a water rate study.

The district’s board voted 3-0 on Thursday to contract Bartle Wells Associates to conduct the study, allocating up to $32,000 for the services. Directors Marshall Ochylski and Michael Wright were absent for the vote.

The study will include a 10-year financial plan with projections of capital improvement needs, growth in development, operational cost escalations and water sales.

“The proposed water rate study is a critical step in the planning process for the district’s finances,” district engineer Robert Miller wrote in a staff report. “Increased revenues will be necessary to fund approved capital improvements, and rates will need to be increased to provide stable income during periods of reduced water sales.”

One of the firm’s tasks will be to determine how water conservation measures could affect the revenues the district collects.

Rate increases could be necessary to make up for shortfalls in revenues collected from water sales in correlation with water shortage contingencies.

Bartle Wells plans to complete the study Dec. 4. If approved, the board could hold a required Proposition 218 hearing on the proposed rate increases on Feb. 5, 2015.

Proposition 218, passed by California voters in 1996, requires that notices of proposed rate increases be sent to affected property owners and a formal protest hearing to be scheduled before an increase can be adopted.

If all goes as planned, the new rates could be put into place by April 2015 or July 2015.

The Los Osos Community Services District — which serves about 2,760 households with water — has $4.9 million in high-priority capital improvement project needs and $19.5 million in longer-term needs.

The district’s last rate study was completed in 2009 with a revised rate structure implemented in 2010. The district previously applied three rate increases from 2000 to 2010.