SLO rates rising despite abundance of water

June 20, 2013

water2By JOSH FRIEDMAN

San Luis Obispo water rates will increase next month for the eighth consecutive year even though the city currently only uses about 55 percent of its annual supply of water.

As the city continues to raise rates, it has amassed an abundance of water that it could use to generate more sales and lower rates. However, the city does not sell water outside its boundaries, and it instructs its residents to practice conservation, even though it is raising rates the most on those who conserve the most.

San Luis Obispo has three primary sources of water — Nacimiento Reservoir, Whale Rock Reservoir near Cayucos and the Salinas Reservoir at Santa Margarita Lake — which provide the city about 10,000 acre-feet of water yearly.

However, the city only pipes in about 5,500 acre-feet per year.

The unused water remains in the reservoirs, amassing reserves. Reserves shrink, though, when droughts occur. Presently, the city has enough water to last 11 years of a drought as dry as the worst it has previously endured.

In addition to piping in reservoir water, San Luis Obispo also produces recycled water. The city’s water reclamation facility converts sewage into water for irrigation and agricultural purposes.

San Luis Obispo, which is the only city in the county that operates a water reclamation facility, recycles more than 5,100 acre-feet annually. But, it dumps about 97 percent of the water it recycles into San Luis Creek, or about five million gallons per day of recycled water.

In 2010, the city recycled 5,250 acre-feet of water but only delivered 153 acre-feet of recycled water for usage.

A state permit requires the city to flush 1,807 acre-feet of recycled water into the creek annually to maintain a proper habitat for steelhead trout. However, the remaining recycled water, which totals more than 3,000 acre-feet of water annually, is available for the city to sell.

But, since the onset of the water reclamation program in 2006, the city has only sold upward of 160 acre-feet in a year. Most of the recycled water the city sells goes to its own Parks and Recreation Department for watering fields, and the rest goes to private customers within the city limits.

A 1983 ordinance prohibits the city from selling water outside city limits, but the council could amend the ordinance at any time.

In spite of the ordinance, the city has hired a consultant to study the recycled water market, Water Division Manager Wade Horton said. The Utilities Department is considering the possibility of selling recycled water to wineries in San Luis Obispo County.

“The city of San Luis Obispo invested into being able to use some of that water and sell it,” Horton said. “It could generate long term revenue that could bring the rates down.”

The Utilities Department, though, is still not considering the possibility of selling reservoir water, which is of much higher demand. Water levels in North County are particularly low right now.

At a recent council budgeting meeting, former mayoral candidate Steve Barasch suggested selling water to other agencies to help lower the rates.

Mayor Jan Marx responded by saying she supports the city prohibition on “wheeling water” and that selling water outside the city limits creates sprawl and conflicts with smart growth principles.

Horton said selling reservoir water might compromise the city’s reserves.

“We spend a lot of money to develop a water supply, so we want to make sure the water is there in the case of a drought,” Horton said.

The city likewise remains firm in its stance that residents should conserve water. Despite just restructuring rates so that the biggest conservers face water bill increases of at least 20 percent, the Utilities Department is not encouraging increased usage.

“The city of San Luis Obispo wants you to conserve water,” the department website says.

To help residents conserve, the Utilities Department offers tips on water conservation and even water audits, in which staff speak with residents “in an effort to discover the cause of unusually high water bills.”

However, the department does not recommend using more water in effort to lower rates. At the water fund hearing last week, Utilities Director Carrie Mattingly joked that making such a recommendation in San Luis Obispo would amount to “heresy.”

Councilman Dan Carpenter did so anyway.

“Stop conserving. Start using our water if you really want to see our rates come down,” Carpenter said at the water hearing. “We need people to use more water because we need that revenue stream to offset our costs.”

City water costs increased significantly three years ago when the city began paying its portion of the Nacimiento pipeline. The city owes San Luis Obispo County $162.2 million for its share of the pipeline, including $78.5 million in interest payments.

The city must pay off its Nacimiento pipeline debt over a 30-year period. Including maintenance, the pipeline currently costs the city about $6.2 million a year.

Another major expense lies ahead in the form of a state-mandated upgrade to the city’s water recycling facility, which falls under the city sewer fund. The upgrade will cost $63.2 million, and the city plans to issue a bond to cover $50.8 million of the expense.

The city plans to begin making payments on the upgrade to the water reclamation facility in 2016-2017. It expects to owe $3.8 million annually over a 20-year period for the upgrade.

Like water rates, sewer rates will increase both at the beginning of next month and on July 1, 2014. The average residential sewer bill for San Luis Obispo residents next month will be $58.85, slightly higher than average water bill of $57.48.

 


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36 Comments

  1. Jorge Estrada says:

    Just like local government, the Sate of California is on the hunt for new revenue streams. San Luis Obispo is feed primarily by appropriated water, water that is managed by the State. One could say it is the State of California’s water and they too may start charging their fees per acre-foot.
    Yes, another hand that has been quietly in the transition pockets and soon in yours again. Why heck, it is only right that our State charges for water they have been alocating for free, far to long, right?

    It’s so simple that you may as well lock your knees and tie your running shoes right now.

    (1) 5 Total Votes - 3 up - 2 down
  2. hijinks2 says:

    Reading through all the comments it is obvious that people are not happy with how things are being managed and operated at the City of SLO. However, what will people do – nothing and that is what the City Leaders bank on. Nearly 70% of the population is transitory – renters and they are concerned about just surviving, not what additional taxes or fees or fee increases the City will impose on them. Renters don’t have time to dabble in this issues and that is what City leaders rely on. Highest salaries in the County, best health care benefits in the County and in fact, the upper management are paid better than any other comparable agency in the state. The city attorney’s office has not one, but two full time attorney’s, a paralegal and two contract attorneys, plus a number of firms on retainer all year round to do the work that the City Attorney is blatantly too incompetent to do.

    The City has also always been a “Projects” organization. Dave Romero liked big projects, made him feel big. Rather than maintain what you have, just build new. The City imports its water from the north coast and north county which is no different than LA which imports its water from northern California. Hmmm, old man Mulholland created the great water infrastructure at any cost and then his granddaughter assisted with the creation of the City of SLO’s great water infrastructure at any cost to the areas north. North County is facing a water crises in its groundwater and wouldn’t you know it the City of SLO has its straw in north county sucking the life out of that area. Here is a fact, enough water gets sucked out of north county by SLO to completely restore the ground water system. History does repeat itself. And rates continue to go up and up and up.

    (6) 12 Total Votes - 9 up - 3 down
    • easymoney says:

      Spot on post….
      “North County is facing a water crises in its groundwater and wouldn’t you know it the City of SLO has its straw in north county sucking the life out of that area. Here is a fact, enough water gets sucked out of north county by SLO to completely restore the ground water system. History does repeat itself. And rates continue to go up and up and up.”
      Not only that, but SLO County has had ample opportunities to prepare over the decades, by building new reservoirs, but built only one since the 60’s, Lopez Lake. The city of SLO has exploited external sources from day one. None of the reservoirs it draws from today was built by the city nor it’s money…

      And I love the Mulholland reference, as having grown up in SoCal when it was all vineyards(table grapes) and citrus orchards, and watched it explode as I grew up. Folks need to watch China Town and see a pretty good likeness of how it all happened. Move the shell with the pea around, claiming abundant water for growth, and after lifting all the shells surprise no pea…

      (-1) 3 Total Votes - 1 up - 2 down
      • catsdad says:

        North County has a water crisis not because of the City of SLO but because of the pro growth, at the expense of the taxpayer, representatives they have elected over the past two decades. The City of SLO acquired the right to the Salinas Reservoir from the Corp of Engineers in the early 50’s because that is where the population in the county was. North county was then ALL rural and had no need for the water.
        There was also no need for additional reservoirs in the 60’s, 70’s or 80’s. Not until Regan’s policies made real estate a commodity did it make any financial reason to develop in the back water of San Luis Obispo County. As the prices were speculated up in LA and SF those making the unnatural profits looked for less populated places than the ones they had looted and ruined. Hence the over development and population of SLO county.
        Without the City of SLO the Nacimiento Pipeline would never have been built and the North county would never have the opportunity to take advantage of this resource. You should be thanking the citizens of SLO town for being so gullible to allow Dave Romero to sell them out and have them pay for your new water source. Now it is up to you to use that water wisely or just wait for the State to reallocate the water SLO town is not using as it is against State Water Resources rules for municipalities to hoard unused water.

        (-1) 5 Total Votes - 2 up - 3 down
        • tomsquawk says:

          “Not until Regan’s (sp?) policies made real estate a commodity”? please, it’s always been a commodity since the railroads started promoting the “end of the line”. watch a W.C. Fields movie. Oranges.

          (1) 3 Total Votes - 2 up - 1 down
        • easymoney says:

          The reason why the city has taken water from other sources outside the city is because the city has no reliable sources of it’s own and it did no forward planning to meet the growth it allowed or encouraged. And yes there was a need for more water and reservoirs in the 60′, 70’s and 80’s when the majority of the growth took place.

          (2) 2 Total Votes - 2 up - 0 down
          • catsdad says:

            After the Whale Rock Reservoir was built in the late 50’s it gave the City of SLO enough water to achieve the build out plan initiated by the group in the 80’s who made SLO town the gem it was. All the infrastructure built at that time was for a slow growth community to live within it’s means. But all that was ruined when Dunn, Romero and Hampian arrived as dupes of the Chamber of Commerce.
            When Salinas water was available no one in the north county wanted to participate. When Whale Rock was built no one on the coast wanted to buy in.
            If you knew your history you would know that there was not any need for the Nacimiento Pipeline save for the unscrupulous development Romero and his ilk wanted.
            Why do you think the staff and council want us to use more water? Because we are using less than half of what we are paying for and eventually the State will want to allocate away what we are not using.
            Please get your facts straight nothing you stated was true.

            (-2) 4 Total Votes - 1 up - 3 down
  3. R.Hodin says:

    It would be interesting to discover how many acre-feet of water is freely given from the Public Works yard hydrant on Prado Rd. Our neighbors in rural SLO have been supplementing their wells for decades from this source. Contractors also have free access. Is this water metered?

    (5) 9 Total Votes - 7 up - 2 down
  4. Maxfusion says:

    “The future of California’s water supply is not certain. Climate change is occurring much faster than originally anticipated, and this includes an increase of temperature by an average of 10 degrees F by the year 2100.”

    Rubbish, that’s the same BS we heard in 2000.

    http://www.reuters.com/article/2013/04/16/us-climate-slowdown-idUSBRE93F0AJ20130416

    (3) 7 Total Votes - 5 up - 2 down
  5. catsdad says:

    You obviously do not know the planned “management” of the City of San Luis Obispo water portfolio. While SLO could have regulated it’s own growth and continued indefinitely with the two water sources and the recycling program it originally had once Nacimiento was approved the out of town developers with the help of dupes like Dave Romero started their push to develop. If you think that once all these annexations are in and the city’s pipeline are eventually extended to the Edna Valley, as noted in the master plan for the Nacimiento Pipeline you will see that once the out of town grubs were given control of this city by Romero and Hampian the end was inevitable. Fool your self if you want but the writing is on the wall.
    The state water was originally planned as a back up systems in case of serve drought but when cities like Santa Barbara, who was trucking in water from Alaska at the time and had a desal plant with high costs, pressured to use it as their primary source then the whole project was doomed and now with sever over development through out the Central Coast, due to the greed of developers, corrupt politicians and ignorance of citizens, of course the state water is short.

    (2) 16 Total Votes - 9 up - 7 down
  6. MaryMalone says:

    I have many issues with the City of San Luis Obispo, but their management of their water portfolio certainly is not one of them.

    Thanks to the foresight of SLO’s past leaders, SLO has an enviable water portfolio. They have managed it very, very well, and this secures the future water supply–and, indeed, the future–of the City of San Luis Obispo.

    The future of California’s water supply is not certain. Climate change is occurring much faster than originally anticipated, and this includes an increase of temperature by an average of 10 degrees F by the year 2100.

    In addition, the State Water Project is not the sure thing it was anticipated to be when it was first constructed. The SWP delivered about 30% of its contracted amount to cities, farmers, etc. this year, and the State has come flat out and said that they will never be able to deliver more than 60% of the contracted amount in the future.

    Also, with the anticipated increase in climate temperature comes the decrease in the Sierra snow pack. The snow pack in the Sierra is a handy way to store water for delivery at a more manageable rate. Without the ability to hold the rain that falls in our short rainy season, we will not only go dry sooner, but when it rains, there will be huge increases in floods.

    Finally, there is the very iffy sustainability of the main holding reservoir for the water sent to Central and Southern California (San Joaquin-Sacramento Delta). The levee system which contains this water is very old and was not built with the intention of protecting California’s water supply. It was built by farmers with whatever fill they had handy as a means to hold back the water so they could grow crops in the rich soil.

    Experts (including the U.S. Army Corps of Engineers) indicate the levees are at major, major risk. They will fail, and it will be much sooner rather than later.

    Once that happens, the Delta storage system will be contaminated by saltwater and will never again be able to serve as a water reservoir. South of the Delta, water users will have about six months worth of water stored in southern reservoirs–enough to last us, if we are lucky, 6 months. After that, there will be no water left until it rains again.

    This will have a huge negative impact on California’s water supply and, therefore, all who live and work in California.

    SLO City is doing the right thing by standing firm on conserving the resources it has. It is the only reasonable thing to do when the future of California’s water supply is in such doubt.

    (-10) 20 Total Votes - 5 up - 15 down

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