For the second time in three months, the citizens of San Miguel will have to wait to see whether their water rates increase because the Community Services District (CSD) tabled the discussion at its Nov. 16 board meeting.
“This is happening in part because of inflation, and in part because the district wanted to find a way to design a better utility rate structure,” Anthony Kalvans said. “The proposed structure would eliminate tiered water rates and focus on tying water bills to actual usage.”
Kalvans, who serves on the CSD’s board and spoke to New Times on behalf of himself, said the proposed water rate change has been in the works for the last few months as the district looks at ways to fund its infrastructure.
San Miguel’s current water rates are tiered, with larger properties paying an automatically higher base amount than smaller properties. The proposed changes, according to Kalvans, would effectively restructure how the system works.
“This is more of rate reform,” he said. “This new rate form will help people who were using less than the base amount [pay less].”
The reform—which would be the first rate change San Miguel has made since 2018—would occur over five years, and according to Kalvans, would likely decrease the overall water bill for some residents.
“Staff did an analysis and determined that roughly 30 percent of the town will see an immediate rate decrease,” he said. “Others will see a rate decrease in the summer as they will no longer be penalized for filling up a pool for their family or growing vegetables in their garden.”
However, some residents and board members have taken issue with potential change, as their properties would actually see an increase in bills with the rate reform getting rid of the tiered system. Properties that use large amounts of water would get charged more for it than they currently do.
Those parties made their voices heard, according to the Nov. 16 staff report during the Proposition 218 public input period. The state rule requires that any proposed utility rate changes be put out to the public for protest before adoption. If written protests are received from more than 50 percent of affected properties, the rate changes can’t be adopted by the board.
San Miguel CSD started the rate change process over the summer, according to the Nov. 16 staff report. The written protests were counted and brought to the district’s September meeting, but the board delayed making a decision because it questioned the validity of some the protests, even though there weren’t enough to prevent the CSD from moving forward with the proposed changes.
The district confirmed that some of the protests were invalid, according to SLO County voter records, but the board again delayed taking any formal action on Nov. 16 and pushed a decision to the Dec. 14 meeting.
Kalvans said the board has to either approve the rate reform or explore three potential alternatives: It can keep the current structure, which calculates rates based on tiers of use. It could lower rates across the board, which wouldn’t generate enough revenue for the district. Or it could explore a middle ground option.
“The final one would be a more phased-in option. … At the October meeting, I asked about a $5.15 per unit starting point,” he said. “That would give 56 percent of all ratepayers a rate decrease but would require using reserves to cover the [revenue] gap in the first year.” Δ
This article appears in Nov 23 – Dec 3, 2023.
