San Miguel CSD to hike rates to avoid running out of cash

With the San Miguel Community Services District running out of money in both its water and sewer funds, residents of the North County town are facing near-immediate hikes to their monthly water and sewer bills of about 200 percent and 160 percent respectively.

Under a proposal crafted by a consultant hired by the CSD, the average single-family water bill in San Miguel would rise in July from about $17 to about $52. By 2022-2023, the average water bill would increase to about $58.

Meanwhile, in July, the average single-family sewer bill in San Miguel would rise from about $37 to about $96. It would then increase to approximately $108 by 2022-2023.

San Miguel currently has among the lowest water and sewer rates in SLO County. However, the community is also among the lowest in the county in household income levels.

The San Miguel CSD has not raised its water and sewer rates in about a decade. Over that span, operational costs have grown, and both the water and wastewater reserve funds have dwindled to nearly zero, according to a CSD staff report.

If the CSD maintains its current revenue levels, the water fund will run out of money by 2020, and the sewer fund will run out of money by 2021, the staff report states.

For the current fiscal year, the district board approved a budget deficit of $268,817 in the water fund and $174,141 in the wastewater fund. Deficits of $336,722 in the water fund and $177,221 in the wastewater fund are projected in the 2018-2019 budget.

CSD staff say, to just fund existing operations, the district needs a 100 percent revenue increase from water bills and a 50 percent revenue increase from sewer bills.

District staff attributes the CSD’s rising expenses to multiple factors, including unusually high legal costs over the last few years, due in part to groundwater litigation. The district is currently operating with the fewest personnel possible and experiencing numerous failures within the water and wastewater systems because of a lack of preventative maintenance, CSD staff say.

A special district board meeting on the proposed rate hikes will take place on Friday at 6 p.m. in the CSD board room. The district plans to discuss the issue again at a board meeting on March 22, before holding a public hearing on May 25 to adopt the rate hikes. If approved, the new rates would take effect on June 1.

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2 Comments about “San Miguel CSD to hike rates to avoid running out of cash”

  1. perk o late says:

    Good case of complete mismanagement. No rate increase in a decade??? What business has operated without an increase for 10 years? Impossible.

  2. Boldguy says:

    Throw in some Pension Costs, a little consultant work, sprinkle it with some legal bills, voila, the perfect stew!!!

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