$41 monthly rate increase 'reasonable' to pay for Morro Bay water reclamation, study says

The four-member commission appointed by Morro Bay City Manager Scott Collins gave a nod of approval Friday to a proposed $41 increase to ratepayers' combined water and sewer bills; the increase would go toward financing the construction of a new water reclamation facility (WRF) to replace the city's existing wastewater treatment plant.

The increase would go into effect July 1, 2019.

The commission, tapped "to evaluate the costs and potential user rate increases associated with the (WRF)," met eight times in two months with city staff, an engineer and a financial adviser "to gather and analyze information regarding cost components of the WRF project," according to the report.

The commission wrote in its findings that it "considers the city's rate proposal to be reasonable."

It also concluded that the $41-a-month surcharge should appear on raterpayers' bills as a separate line item. The commission also recommended the city council delay approving the increase until the council's Aug. 14 meeting "to provide city staff and the program manager sufficient time to negotiate any potential additional cost savings."

Under the previously approved rate structure set to go into effect July 1, 2019, the average Morro Bay water/sewer customer will pay $150 a month. That will increase to $191 a month with the additional surcharge.

"The new rate would finance the WRF project, provide $1 million annually to each of the water and sewer capital programs, and fund the ongoing operations and maintenance of the entire water and sewer system," according to a statement from Collins' office.

The Blue Ribbon Commission, appointed April 23, consists of Homer Alexander, a retired small business owner; John Martin, a certified public finance officer; Joan Solu, who owns several motels in the Morro Bay area; and Barbara Spagnola, who "recently retired after 25 years in IT management, contract negotiations and budgeting," according to the commission report.

The City of Morro Bay is in negotiations with two partnering firms — Filanc of Escondido and Black & Veatch of Irvine — to complete the project.

This story was originally published June 23, 2018 at 2:38 PM with the headline "$41 monthly rate increase 'reasonable' to pay for Morro Bay water reclamation, study says."