SLO rates rising despite abundance of water

June 20, 2013


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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So all the cry babies are out blaming Marx and Ashbaugh for the continually increasing water rates and the financial mess the city is in. For those with short memories it was Dave Romero and Ken Hampian who left the city with a $5 million dollar deficit which they blamed on the police and fire fighters. After the Chamber of Commerce had their boy Carter front their propaganda program to eliminate arbitration the city is still running a $5 million dollar deficit. Or why else would they be asking to extend the Measure Y tax ?

The city doesn’t have to sell water to North County they are just letting the water from Santa Margarita lake out gradually and letting it flow naturally into the Paso water basin. What do you think the Nacimiento Water Commission does when it meets in Templeton at 4 PM on irregular Thursdays? For six years it has not chalked up one public comment. Another back room deal cooked up by conservative politicians to lock out public participation.

Carpenter would love for all of us who can’t afford the water rates now to use even more water to support his development cronies. Marie Antoinette anyone.

With a 70% residential rental total now by the end of the decade SLO town will probably be at 80% and wont be fit for any families. Get out while you can.

SLO is required to release water from Santa Margarita to maintain the Salinas live stream, part of the original agreement with the Army Corp and County of SLO which owns the lake but didn’t want the water way back when! The SLO County also didn’t want the water from Nacimiento which is how Monterey now gets the majority of it .

I agree that Romero was the big pusher for the Nacimiento Project (he’s an engineer, it was a dream come true for him) and of course Hampien gave away the chickens, eggs, shit and coup when he and Bill Statler (finance director) allowed the realignment in the PERS pension plan, for which they were the biggest benefactors of. But, take nothing away from current leadership, they too are spending on their pet projects like they were millionaire. Jan Marx was on the City Council from 1998 to 2002, reelected in 2008, and has been the Mayor since 2010. We have every right to point the finger at her and this mess which, yes, she helped create.

The 2007-08 General Operating Budget was $45.3 Million and Tuesday night the City Council pasted the 2013-14 General Operating Budget of $57.3 Million which is a 28% increase in 5 years. How many private businesses have an additional 28% speeding increase during this time.

Yes, this is Jan’s leadership problem, she is the mayor!

I know the story about the release of water upstream for the fish but where are the records of how much water needs to be released, and how much is being released?

Romero being an engineer had nothing to due with his dream. He was present during both voter rejections of additional water to stem growth. His objective was the same as all lame conservatives, to screw the taxpayers, deceptively if need be, to benefit his rich benefactors.

Jan Marx may be a wimp but to blame her for decisions made by conservative dominated councils and staff all the while she served is petty partisanship. Like John Ewen and Allan Settle she has chosen to go along by getting along with the Chamber “crowd”.

Where’s Dan Carpenter and Kathy Smith in all this. The Mayor is just a glorified council member and had no more authority than any other council member. Other than voting NO on every issue he supports Carpenter might as well pull a Clarence Thomas and just vote without speaking. Kathy Smith doesn’t even know what is going on half the time.

There is not enough room to line item the city budget here, but how many of these expenditures are carried over from 2007-08? To spew percentages and comparisons with the private sector, of which there are probably a multitude with 28% spending increases over that period of time, is meaningless, except to the uninformed.

The staff makes the budget and the council reviews it. They make suggestions on certain items but one council member can not overhaul the city budget. Even bean counter Carter found that out. What we have is an apathetic citizenry who wont get involved save to cry on posts like this one.

Your protective statements of Ms. Marx is a joke, but that’s OK, your best statement was “The staff makes the budget and the council reviews it.” Enough said!

The only joke is a sad one considering the ignorance of the voters who thought council members Romero, Brown, Ewan, Settle, Schwartz and Carter along with Hampian and Dunn are not the real cause of the city’s financial malaise. To blame one person who was in a minority in a cast of dozens does not speak well to your comprehension of city governance.

“The city doesn’t have to sell water to North County they are just letting the water from Santa Margarita lake out gradually and letting it flow naturally into the Paso water basin.”

That water is mandated to flow into the Salinas River in what is called a “live stream”.

Anyone who is really interested in the Salinas Dam and the water that goes to the City of SLO only need look into SWRCB permit number 7253, which had been active and in good standing since 1947, until 1999 when it was revoked by the SWRCB for “lack of diligence by the County of San Luis Obispo” and the historic “annual 200 acre feet” allotment which had been awarded to the community of Santa Margarita, was cut off and awarded to guess who, the City of SLO.

Santa Margarita which had the lowest water rates in the county for many years and was originally built in it’s location(by the railroad) specifically because of the abundant water, is now faced with soaring water rates and a mandate by the SWRCB “to provide an additional emergency water source” in times of drought and ironically one of the local sources “not allowed to be investigated by the CSA23 (SLO County waterworks #6)is the very water the community had aright to back in 1998…

Now that Brown is not on the council we can count on more of the same….more pay/pensions for police/fire; a multi-million homeless center on lower Higuera (which will bring in hundreds more homeless from all over the state). Carpenter/Smith will be the minority vote on all important issues….and to make matters worse, Christianson will replace Marx as mayor down the road.

I don’t see anything positive in San Luis for many years to come. If I was younger and still working I would leave this town. Grover/Pismo much better choices and lower real estate prices too!!

We need new conservative faces to run in the next election…..get rid of Ashbaugh/Marx/Christianson asap!!

And in an unrelated story, state officials received a 5% pay increase today. Moonbeam was given a $8,699.00 salary increase. Unbelievable!

And “Moonbeam” (the elected Governor, Jerry Brown) will still make less than our city manager!

But the SLO City Manager is worth it ??

Hippocracy at the highest levels of local government. Tell the public one thing and implement an alternative agenda for the betterment of the masses!

Hippocracy? Government by hippopotami?

I don’t know, given the quality of government we now have, maybe a government of hippos would be an improvement.

Considering that the Hippo is one of the most dangerous critters around Africa and enjoy “dung showering” , no it would not be an improvement.

That said, bring on the change.

same as it ever was

you have NO idea how well you hit the nail on the talking head (thanks DB). i’ve been speaking with my baby itty bitty 35 year old daughter today on seperate matters (who is very heavily involved in water) and it just comes around. maybe thre is a movie or two about water out there?

p.s. video is an A+

Today, government is run by robbing Peter in order to pay Paul. It’s only a matter of time before the city starts selling water to fund other needs. Thus the continued increases, despite the abundance of water.

It’s all about smoke and mirrors.

Just wait until the Fed stops propping up the stock market by buying 84+ billion in BONDS each and every month. You want to see collapse that trickles down, just wait for that… any day now…

it’s starting

Let’s see – we pay a fortune for water we don’t use, the groundwater basin in Paso Robles is being depleted by the wineries, and we need money, but we don’t want to sell it to the county because it would “encourage urban sprawl”? We owe the county $162 million for this water that we are not using and we recycle water to dump it in the creek. Staff recommends another $50.8 million bond for the sewer upgrade and as reported elsewhere, wants to float a pension obligation bond of who knows how much.

What IS the total indebtedness of this city of 45,000 people? Where is all this money going to come from? The best and brightest have led us into a financial hellhole that I fear we will never dig ourselves out of. Bankruptcy anyone? Great strategy – get the bond money, build the projects, default. I really think this is the strategy. but woe to the residents who will still be stuck with outrageous water and sewer bills forever. Meanwhile these financial geniuses walk away with their six-figure pensions paid for by us residents.

And don’t forget the employee’s pensions, because even if the City was to go bankrupt, the pensions remain in place. Even the City Council is getting pensions and health benefits after they leave office. You see, making the decisions they make “for the rest of us” rewards multi-times. Just like Ken Hampien (retired City Manager) getting his $165,000 annual pension, or John Dunn (retired so Ken, John’s assistant got the job) getting his $105,000 annual pension, or Bill Statler (retired City Finance Director) getting his $142,900 annual pension. Their decisions definitely benefits their bank accounts.

It is to bad that SLO could not send the recycled up north to the wineries because 4,000 acre-feet annually is just wasted. The City must really have a major issue with the sewer as it has not even paid off the last sewer upgrade of about 20 years, we still owe on that and again, the City is doing another $63 million upgrade. SLO spends more on their sewer than an other community in the County and there is only a population of approximately 44,000.

To bad the above story did not state how much water the City has received from the Nacimiento Project for each year for the past three years considering they are paying $6.2 million every year for 30 years for nothing. Paso isn’t using it, SLO is not using it and so who is getting water out of this $162.2 million dollar project. Who is using it?

Best advice possible….Listen to Jan Marx and John Assbaugh and do the exact opposite. If they say conserve then leave the spigots on. If they say water to your hearts content then turn the spigots off. Again, the mental midgets of San Luis Obispo are just really into self abuse…..conserving water so the city council can raise the rates to pay for the welfare retirement plan

Now they have a third wheel to become the “trifecta of mismanagement” – but there are enough people on the public dole to keep them going, so it’s all good I’m sure.