Sanitation district should not yield to Ogren’s outrageous demands

June 30, 2015

OPINION By MAYOR JIM HILL

As a member of the South San Luis Obispo County Sanitation District Board, I am committed to minimizing costs and fairness in billing practices for all District ratepayers. The member agencies, Grover Beach, Arroyo Grande and Oceano Community Services District (OCSD), have always collected sanitation district fees as part of their routine utility billing so ratepayers would not be inconvenienced by multiple bills for related services.

Water supply and sewer collection services are provided by each member agency, and wastewater processing is provided by the sanitation district. The portions of the payment for water supply and sewer collection are kept by the member agency and the portion of the bill for wastewater processing is collected by the member agency and passed through to the sanitation district.

To compensate for the cost of customer billing and passing the funds through to the sanitation district, each member agency back-charges and is paid by the sanitation District. State law says that an agency can only charge the reasonable cost of providing these services. Historically this charge has been approximately $2 per connection per year although there are no written agreements or policies setting or demonstrating the reasonableness of these charges.

Recently, OCSD arbitrarily increased the amount of their charge for billing services by over six times. The amount charged by OCSD is now approximately $13 per connection annually. The total amount charged by Oceano is more than that charged by Grover Beach although Grover Beach has double the number of connections. OCSD is charging double the total charged by Arroyo Grande, although Arroyo Grande has three times the number of connections.  The OCSD’s General Manager Paavo Ogren claims this increase is reasonable because it represents half of the cost of their utility billing in consideration of all the staff time required.

Unlike the water bill or sewer collection fee, the wastewater processing charge is not based on usage volume but is a fixed amount that requires no calculation on the part of the member agency staff. All residential customers pay the same fixed amount every two months. The payment the member agency makes to the sanitation district every two months is simply the fixed fee times the number of system connections the member agency has.

An impartial benchmark for reasonable billing service cost is available because the County of San Luis Obispo would add the sanitation cistrict charge to the property tax roll for $2 per connection per year- the same amount the member agencies have historically charged.

The sanitation district must not yield to outrageous demands for immediate agreement to unjustifiable charges from OCSD that are categorically unfair to ratepayers. A deliberate process to reach a fair, justified and documented agreement on member agency charges is needed.  The option of putting OCSD customer charges for wastewater processing on the property tax rolls is available if necessary to protect sanitation district ratepayers.

The sanitation district board will discuss Ogren’s demands on Wednesday, July 01, at 6 p.m. in the Arroyo Grande City Council Chambers