LO Sewer Rates to Jump 12%

Written by Estero Bay News

July 15, 2021

Signs that the coronavirus pandemic is surely over continue to show up and the latest is an indication that the honeymoon is over in so far as discounts on sewer rates are concerned.

County Supervisors voted June 22 to end a program that put off a scheduled 2020 sewer rate increase in Los Osos, in deference to the pandemic’s hit on workers and businesses.

But that’s now over and the County is making up for that loss of revenues and also instilling a second rate hike for 2021. Get ready Los Osos, your sewer bills are about to rise 12%.

In a report from the County Utilities and Finance Divisions, Supervisors were asked to end last year’s deferral of a 6% rate hike that had been set in motion with an ordinance approved in April 2020 (Ord. No. 3413) that increased sewer rates for the entire SLO County Wastewater Assessment District 1 (Los Osos Sewer Service Area). That increase should have kicked in July 1, 2020.

But Supervisors, in response to the pandemic’s closure of all “non-essential” businesses and stay-at-home orders from the Governor, put the increase off “until 30 days after the termination of the proclamation of local emergency,” the report said.
Gov. Gavin Newsom declared June 15 as the date when the State would drop most of its pandemic restrictions, so the County sees July 15 as the date to meet the Supervisors’ delay order.

“If approved today,” the report said, “Los Osos will have realized a one-year rate increase deferment.”
The County had gone to Supervisors for the new rates in 2019 and after a Proposition 218 protest vote failed, approved the new rates that are designed to cover actual expenses incurred by the sewer assessment district in April 2020.

The initial ordinance, passed when the new treatment plant and the community collection system was completed in 2016, predicted what the expenses and funding needs would be.
And the 2020 vote set the rates to match the expenses that were actually incurred during the first few years of operations. But COVID-19 screwed that all up.

“Over the last year the wastewater system has taken on more debt to cover the revenue shortfall,” the County report said. “Additional impacts from this delay have resulted in:

  1. Inability to build financial reserves.
  2. Inability to implement planned capital improvements.”
    The County anticipated losing some $842,000 with the rate hike delay, but the actual loss was $774,000 (for FY 2020/21, which ended June 30). Delaying it another year would result in the loss of $1.74 million, “which would put the system in further financial instability,” the report said.
    For those who might not be able to absorb such a big rate hike, the County said there is federal funding available for eligible tenants and landlords “to assist with unpaid rent and utility bills between April 1, 2020 and March 31, 2021, through the CA COVID-19 Rent Relief Program.
    For information on that and other COVID programs, see: www.recoverslo.org/en/rent-relief.aspx.
    And while the new rates are essentially a done deal, the Supervisors will hear the matter once more at their Aug. 10 meeting when they will vote on officially adding the new charges to property tax bills. Ratepayers will have a chance to have their opinions heard.

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