Cambria services district caught between red ink and drought

Cambria’s water purveyor has found itself caught between the drought, the governor’s mandate to cut water consumption by 25 percent and a budget teetering on the red-ink side of the ledger.

When water use drops, the cost of providing water and sewage-treatment services doesn’t go down commensurately. So Cambria Community Services District officials say they have had to find other ways to cover expenses such as staffing, infrastructure maintenance and repairs, testing, monitoring and more.

CCSD and some other districts are trying to raise rates. As a consultant explained the situation in a recent workshop about the rate-increase proposal, the district must divide the cost of providing the service among those who use it.

Of course, doing so isn’t simple, and the clauses, categories and rate tiers involved aren’t easy to decipher, leaving some ratepayers asking, “This is what my bill is now, but what will it be if the new rates go into effect Jan. 1?”

What if

District Finance Manager Patrick O’Reilly has estimated that, if CCSD customers hit the target water-use level on which the rate proposal is based — using 70 percent of the district’s base-level water consumption in 2013, rather than the 54 percent they’re using now — the new rates would generate approximately $40,000 more per billing period.

If that happens, he and consultant Alex Handlers estimate the water and wastewater departments would be self-supporting, as they’re supposed to be, but aren’t.

If 50 percent of property owners plus one (1,968 for water service, 1,915 for sewage-treatment) submit official protests about the rate increases, the proposal would fail.

The Cambrian asked district officials Nov. 30 how many rate-increase-related letters the district had received so far, but no answer was provided by press deadline.

However, some ratepayers also are asking what would happen if the new rates don’t go into effect.

If a protest stops the rates, according to General Manager Jerry Gruber, there could be a cascade of effects.

“Unfortunately, it would result in deferred infrastructure improvements and projects” being completed later than anticipated or shelved, he said in a Nov. 30 email response.

With such factors as most of the district’s infrastructure being elderly, ever-increasing requirements for monitoring and testing, and several new projects on the drawing boards, those delays could be costly.

For instance, Gruber said, “Out of 10 lift stations, I still have seven that need to be upgraded. As discussed, the Fiscalini (water) tank, the Stuart Street tanks and booster station, in addition to Rodeo Grounds (facilities), all need to be replaced. We need to also make improvements to the wastewater treatment plant,” to meet state requirements.

“I believe our legacy over the last five years has been and will continue to be infrastructure, infrastructure, infrastructure,” Gruber said. “We owe it to the community and we need to make absolutely sure that we give our firefighters the ability through reliable resources to fight fires. In other words, everything needs to be in tip-top working order.”

Director Amanda Rice, a member of the CCSD ad hoc committee that researched and submitted the rate-increase proposal, said Dec. 1 that if the new rates aren’t approved, “we’ll continue to do what we have been doing, subsidizing operations for the water and wastewater from the general fund. We’ll continue to do high-priority maintenance.”

She said that if the rate proposal fails, “Yes, it can make cash flow kind of sketchy,” although property-tax payments from the county at this time of year will help in the short term.

Director Jim Bahringer, the other rates ad hoc committee member, said Dec. 1 that for “as long as I’ve been involved,” the district has been subsidizing the water and sewage-treatment departments. The rate increases would “put rates in line so we don’t need to do that.”

Gruber said “the district has implemented minimal rate increases throughout the years,” and according to the research done by Handlers, rate hikes the district has put in place “have not kept up with standard water and wastewater rates from an inflationary standpoint.”

“We’ve needed the raise” for some time, Bahringer said, “and the (reduced) volume of what we’re selling has exacerbated the problem.”

Rice added that if the rate increases take effect Jan. 1, “we should be OK as long as we don’t go too far below the 70 percent usage” on which the rate proposal was based.

In other words, in order for the district’s water and sewage-treatment departments to be self-sufficient after the new rates go into effect, Cambrians would need to tread the narrow path of using more water than they have been for the past couple of years, but still 25 to 30 percent less than they were using in 2013.

This story was originally published December 2, 2015 at 10:17 AM with the headline "Cambria services district caught between red ink and drought."