Oceano CSD demands cash from sanitation district
June 9, 2015
The Oceano Community Services District is threatening to stop acting as a bill collector for the South San Luis Obispo County Sanitation District if the agency does not make an $11,000 payment to Oceano by the end of the month.
Last week, the sanitation district board refused to approve an $11,000 bill it received from Oceano. The sanitation board instead directed its staff to get an accounting from Oceano to determine how it justifies the expense. Because it is an enterprise fund, Oceano is not permitted to charge more than the cost of the added billing.
Oceano, like the cities of Arroyo Grande and Grover Beach, does bill collecting for the sanitation district by adding the cost of sewer bills to customers’ water bills. For more than a decade, Oceano charged the sanitation district $4,930 a year for bill collecting.
In 2013, Oceano began charging the sanitation district $22,000, or semi-annual payments of $11,000, for the same service it used to pay $4,930 without a contract or sanitation district approval. Oceano collects sewage bills for about 20 percent of the sanitation district’s customers.
Arroyo Grande, which has approximately 44 percent of the customers, charges the sanitation district $12,000 a year. Grover Beach collects bills from about 36 percent of sanitation district customers, and city officials say the annual cost of conducting the billing service is $22,000.
When the Oceano district board meets Wednesday, General Manager Paavo Ogren will ask board members to approve a delinquency notice he intends to deliver to the sanitation district, according to the agenda. The delinquency notice, which Ogren has already drafted, states the sanitation district must pay the OCSD $11,000 by July 1, or the Oceano district will stop serving as its bill collector.
Additionally, Ogren demands that the sanitation district sign a formal agreement which states it will make semi-annual payments of $11,000 to the OCSD for billing services.