Amid extreme drought conditions on the Central Coast, water rates in Arroyo Grande are about to shoot up.
Being more mindful about daily water use seems like the obvious solution to save both money and parched land—but not according to the city’s new water and wastewater rate study.
“We’re stuck in the cycle of the less water you use, the more your rates need to go up to account for the less usage. As people conserve more, it doesn’t cost us less to run our systems as a general rule. The only additional cost then is the actual water itself,” Arroyo Grande City Manager Whitney McDonald said at the March 8 City Council meeting. “I understand it can be hard because we’re asking people to cut back and they have to pay more for less water that they’re using. We’re all in that together, we’re trying to make sure we can continue to provide service. That’s what our goal is here.”
McDonald explained to New Times that water costs in Arroyo Grande don’t tend to fluctuate wildly, depending on the amount used. However, the city still has to maintain its water system. As customers cut back on their water usage, Arroyo Grande ends up with less revenue to keep operations running smoothly—and increasing rates is the solution that gets the city back in the black.
“It’s just a cycle that every organization that goes through Prop. 218 struggles with,” McDonald said.
The Arroyo Grande City Council held a Proposition 218 hearing on those proposed increases on March 8, where residents could send in their written opinions as part of the rate protest process. If the majority of the city’s water customers didn’t protest the rate increase, Arroyo Grande could adopt the new water and wastewater rates. The city needed 4,444 protests against the proposed billing structure to reject it, but only received 15 by the end of the meeting. Starting on April 19, customer bills—arriving every other month—will reflect the hike.
“I think in a number of ways, it’s a good system because it’s transparent and open. It’s effective and it ensures that we keep moving forward in a way that provides service at a low cost while also providing us a mechanism to make investments in our system and keep moving forward,” McDonald said.
But at the hearing, some of the dissenters complained about how expensive the rates were going to be for them. Water will cost them 6.4 percent more this spring, and the price will continue to increase by the same percentage each year through 2026. Wastewater rates are set to increase by 8.3 percent over the same time period.
This means that customers would pay an average of $8.51 more overall each billing period. Currently, the average single-family unit that uses 1,900 cubic-feet of water pays $131.22. By fiscal year 2025-26, they would have to pay $179.07 for the same quantity. Likewise, 1,900 cubic-feet of wastewater presently sets back customers by $68.49, and by fiscal year 2024-25, it would cost $77.
City staff tabulated these rates accounting for Arroyo Grande’s participation in the Central Coast Blue recycled water project, where it will pay for 25 percent of the $55 million cost.
Arroyo Grande residents Dennis and Kelly Royer questioned the Proposition 218 process at the hearing. The city has to notify customers about the hearing 45 days in advance, but the Royers claimed they received their slip only three weeks prior to the meeting. The whole process, they said, made them feel very uncomfortable.
“Probably the most democratic way of soliciting true input from the community is not this letter of opposition that requires all this testament statement that you live there,” Kelly said at the meeting. “You say you need a quorum of 51 percent to overturn this effort to increase the rates. As a resident, we’ll never know how many people actually submitted letters opposing this rate increase. We have no way of knowing that, so it doesn’t feel very fair.”
Others like Ken Leonard, who has been living in Arroyo Grande for 24 years, said his large family of eight would be unfairly impacted by the new rates even though they are already conserving water.
“I turned off my irrigation seven years ago. We’re very careful with how we use water, that’s how I was raised. Right now, we run about 20 units per bill that puts us mostly in tier 1 under the current system,” Leonard said. “In the new scheme, as I understand it, half of our water use is in tier 2, and we’re doing the absolute minimum that we can do in the house: full laundry loads, no leaking fixtures anywhere, there’s nothing else we can do to cut our water use. Yet, we’re being penalized as though we’re being careless with our water use.”
Arroyo Grande officials informed the public that the rate increases are overdue because water rates were last set for fiscal years 2014-15 through 2018-19, and wastewater rates have been frozen since 2009. As part of the latest rate study, the city even planned to add a stormwater fee but received pushback from a watchdog organization.
In December 2019, the Howard Jarvis Association challenged Arroyo Grande for trying to implement stormwater fees, which it said was legally noncompliant. Later, when COVID-19 struck, the city was forced to pause an updated rate proposal. It used American Rescue Plan Act funds to cover operational costs during that time. But now those reserves have shrunk, and McDonald said that the new charges are also supposed to build back reserve targets.
“As part of that vicious cycle, in addition to you using less water and paying more for the units you use, the longer we wait, the higher the increase,” she said.
Even with escalating costs, the city’s average bimonthly water bill for a single-family unit would be one of the lowest in San Luis Obispo County, according to city data, second only to Grover Beach.
McDonald said Arroyo Grande achieved this with cautious investments, highly dedicated staff, and being proactively involved with the Lopez Reservoir Project.
“We’re able to provide a highly cost efficient service to our customers. If you look at rates across the county, and not even comparing our rates to private providers like Golden State Water Company that’s regulated by [the California] Public Utilities Commission, we’re able to provide people water at a really low competitive rates and our rates study shows that,” she said. Δ
Reach Staff Writer Bulbul Rajagopal at brajagopal@newtimesslo.com.
This article appears in Spring Arts Annual 2022.
As indicated in the chart provided in today’s New Times article, Cambria, by far, has the most expensive water from the cities/towns included in the chart, in the County. To add insult to injury, the Cambria Community Services District (CCSD) will be voting to raise our rates in their Board meeting today. The rate proposal is for approximately $17 million dollars! (For a town of less than 5,700). I wonder how the same chart might look, once these HUGE rate increases have been implemented. Cambria CSD has no problem coming to the ratepayers for however many $$ they see fit, yet the ratepayers see little improvements from the high rates we are paying. We have the highest rates while using the least amount of water. Cambrians have conserved the most of any area, not just in the County, but most likely in the State.
Despite the lack of water, Cambria CSD has no problem in issuing Will-Serve letters for development for mega-mansions in a town that has a very limited supply of water. Thankfully, the Coastal Commission has denied more development as reported in another article in today’s New Times, due to an unsustainable supply of water! When will the CCSD and the County Planning Department get it?
Our water supply comes from two creeks –San Simeon and Santa Rosa, which provide a limited supply determined not only by rainfall but the District’s licenses (diversion permits) from the State Water Board, which were reduced significantly, several years ago.
The Emergency Water Supply (EWS) facility the District built in 2014 to aid in drought situations, has changed names and purposes three times but has remained since 2014, without a regular Coastal Development Permit (CDP). Even if the CCSD had a CDP and could run the facility, the District is strapped in finding an affordable way to dispose of the brine waste. The evaporation pond that was intended to hold the brine, was decommissioned by the Regional Water Quality Control Board (RWQCB) several years ago. Trucking the brine waste to SLO South Sanitation District is currently the only available option to dispose of the brine waste, but the cost to do so is prohibitively expensive; the CCSD can’t afford it! This is a District that in my opinion, has a great deal of difficulty in effectively operating the District –they look to their ratepayers as a continuous “cash cow” but we receive little in return for the millions of dollars Cambrians have and continue to pay for a useless multi-million dollar facility while ignoring crumbling infrastructure.
Tina Dickason,
Cambria
My residence was included in a 218 vote some years ago.
For that vote, we received a letter asking us to vote Yes or No
Each vote was weighted according to parcel – size, I believe.
After the votes were tallied, we were given a list of how each parcel voted as well as the weight of each vote.
We may have had to request that report. I don’t recall.
Interestingly, our property’s vote weight in that case was zero which we did not know until we received the tally listing every parcel’s vote and weight of their vote.
My point is, the vote was not “Send in an objection”. It was “Cast your vote”
Why did the city hold a 218 vote in this manner. I know it is within the 218 guidelines but does it encourage resident participation? I think not.
Proposition 218 is not conducted by a vote (ballot) but rather, a protest. In order to be successful in a Proposition 218 effort, 50% + 1 valid protests would need to be received by the agency proposing the rate increases. Some agencies may include a protest form in the rate increase mailing, but if they do not, then ratepayers can provide their own written protest to include the necessary information as required under Prop. 218 and included in the rate increase notice from the agency. One protest per parcel is allowed!