SLO County town faces massive increases in its water and sewer rates
AI-generated summary reviewed by our newsroom.
- The San Simeon CSD's current average combined residential rate is about $183 per month.
- NBS worst-case scenario has combined home water/sewer cost skyrocketing up to $585.10.
- One director, some community members called the draft study late, incomplete, and flawed.
Imagine if your water and sewer rates for a modest home more than quadrupled over the next five years or so to reach a combined total of more than $800 a month.
That’s the situation San Simeon residents are facing.
The current average monthly residential cost from the San Simeon Community Services District is now $183 — about $117 for water and $66 for wastewater — according to numbers county leaders presented at a June 10 meeting to CSD board members.
Those weren’t the only shockers in the report being finalized now by NBS, which studied the stats and presented a first draft of SLO County’s quarter-million-dollar study.
County leaders noted repeatedly that those initial, eye-popping estimates represent a worst-case scenario.
The soaring service rates could drive some residents on fixed or lower incomes out of the 100-acre town and commercial accounts out of business, some attendees feared.
The county required the study before considering whether it could or would take over the ailing district and its 220-some ratepayers.
“(The report) shows what the scale of the issues are (with the) water and wastewater facilities,” Supervisor Bruce Gibson told attendees, adding that he expects the final version to be ready for the district board’s July 2 meeting.
That scale is daunting, given the size of the town (less than a mile long), the number of residents and San Simeon’s disadvantaged fiscal status. Some of the challenges have been stewing for decades.
Work on the facilities is estimated to cost more than $40 million combined, for a district with an annual budget of around $1.6 million. It’s already operating in the red by more than $83,000 this fiscal year, according to the report being finalized now.
For instance, the CSD’s water infrastructure, much of which is aging, needs to be repaired and shored up soon.
Also, as required by 2028 by the state Coastal Commission, “the wastewater plant needs to be moved off the beach,” from 9245 Balboa Ave. to a new, acceptable location, Gibson said of a complex, expensive process laced with controversy and uncertainty.
The alternative to the move, also extremely complicated and pricey, would involve getting agreement about another method for treating sewage for residents, businesses and Hearst Castle. It could involve other communities, such as sharing facilities with Cambria.
The San Simeon CSD has been trying to disband for some time
The CSD has spent years in upheaval, juggling lawsuits, changes in the general manager and management, aging infrastructure, a four-decade moratorium on approving new water accounts, director resignations and difficulty finding new candidates in the small village.
In May 2024, the San Simeon agency officially requested the county’s help, including possibly taking over responsibilities for the community that straddles Highway 1.
The board submitted an application to the Local Agency Formation Commission (LAFCO). Those tasks include providing water and sewage treatment, plus maintaining the Pico Creek access to the shore, non-county roads and streetlights and other services.
Since then, the county has temporarily taken over managing the district’s operations. It made a start at raising rates, by about 32%, while concurrently studying what’s next for the town and its troubled district and how to help them out of the fiscal hole they’re in.
The supervisor estimated that, if things go well, it would still take another 18 months to two years before the district could dissolve and the county could take over officially.
The entire divestment process would take about eight more years, according to a presentation that night by John Deodoti, San Luis Obispo County’s public works director.
“I like you, John, but really? Eight more years?” CSD’s board Chairperson Karina Tiwana asked.
In the meantime, LAFCO has to approve the change, county supervisors have to agree and so do community members, the CSD board and various other entities.
In the interim, Public Works and the county will continue to manage district operations to keep the CSD afloat.
Taking on San Simeon’s CSD compared to buying a used car
At the meeting and in an earlier interview with The Tribune, Deodoti used an automobile analogy to describe the situation the county faces.
In essence, he said, the CSD “wants us to buy their used car,” which is a total takeover of the San Simeon agency’s responsibilities so the small district can disband.
“Like buying a used car, we’d take the keys and then take it to mechanic to come up with total costs” to keep the vehicle running properly and roadworthy, Deodoti said.
Doing due diligence before accepting ownership of the CSD’s “car,” the report highlights red-flag issues that need to be fixed ASAP like “‘bald tires and a leaking radiator” on an aging vehicle, he said.
Also noted by the number-crunching “mechanics” in the analogy, he added, are the equivalent of lesser yellow-flag issues, “things that will need attention later, such as hoses, a starter, brakes that will need replacing soon.”
He and Gibson emphasized, however, that before anything can happen, community members and all three of the remaining five board members must be firmly on board with the changes and increases.
After all, the LAFCO process includes a vote of the ratepayers. If 50 percent plus one vote no, that kills the increases and the county’s takeover, leaving the district and its community in a fiscal lurch with an uncertain future.
For now, it’s unknown exactly when, or if, that hoped-for unity might happen.
It wasn’t immediately evident that night.
It’s bad news, but not a total revelation
The inevitability of eye-popping rate increases for San Simeon residents has been batted about in recent months and even years, but the interim reports presented by county consultants were especially attention-getting because of their urgency, specificity and the expenses outlined.
In that “worst-case scenario” estimate, for instance, monthly water rates for an average single-family home could leap from about $117 to $585, and for sewer service, from $66 to $259, for a total of $844.
A motel’s monthly rate under the same startling scenario would soar from approximately $967 to $5,431 for water, and for sewage, from $1,077 to $4,312.
The much higher rates wouldn’t be applied to the accounts until project costs are incurred, Deodoti said.
Each of the officials and consultants sharing their reports at the June 10 meeting emphasized that grants are available to help defray some of the costs for the disadvantaged community’s needs.
“San Simeon is one of the best candidates for grants. You check every box,” Deodoti said.
But a project must be “shovel ready” before those grant applications can even be submitted, they said.
Costs for the services district’s projects are high, but the board and community members have been warned about those before by previous studies that were not quite as specific.
The earlier fiscal conclusions may not have been, as Chairperson Tiwana defined the latest ones, as “dizzying.”
Some at the meeting said the report was incomplete with overblown statistics.
One board member, Michael Donahue, and two audience members (including an obviously angry Henry “Hank” Krzcuik of San Simeon) spoke out vehemently against the report, calling it late, incomplete and seriously flawed, in part because it didn’t include results from several previous studies.
Later, after Krzcuik leveled his volley of point-by-point emailed objections and observations, he complied with Gibson’s suggestion to write down his recommendations.
He then submitted to officials and others an emailed, condensed list.
Among the actions Krzcuik recommended were: getting the Coastal Commission to extend the current wastewater plant deadline by five years; establishing a new contract with State Parks for services from the district, (including covering part of the pricey capital expense for moving the wastewater treatment plant); opening the full study to the public; updating the assessment; and quickly firming up the community’s financial commitment.
