Letter from Board of Director Chuck Cesena Regarding Increase

May 4, 2017

Dear Editor:

Recent headlines implied that the Los Osos Community Services District Board of Directors (LOCSD) is out of touch with reality for proposing a water rate increase when many other communities are scaling back on emergency drought restrictions and rates. For communities with at least a portion of their water supply coming from surface storage such as lakes and reservoirs, it may be easier to directly correlate rates with wet winters that visibly refill that surface storage. Los Osos relies only upon groundwater and the effects of a wet winter on groundwater recharge are not so obvious or immediate, especially when this community has just decommissioned 5000 leach fields that recharged the basin throughout dry years and wet ones.   

Although there are several factors that influenced the amount of the proposed rate increase, the basic need arose because in 2014 a consultant prepared rate study predicted a 5% reduction in consumption due to drought related conservation. Our community rallied and cut consumption by 25% or more. Had the 5% prediction been accurate we would not be proposing the current increase. 

In addition to the conservation related revenue shortfall, several other issues needed to be addressed. The recently approved Basin Management Plan calls for each of the water purveyors to implement capital improvement projects intended to slow or stop seawater intrusion into our aquifer. The LOCSD has been using our capital reserve funds to implement those projects but cannot continue to do so indefinitely. Also, property tax revenues received from the County had been allocated to the water department. These taxes are paid by the entire community but the LOCSD only supplies water to ½ of the community.  It was determined that the tax dollars would be better allocated to a community wide service such as fire protection, drainage improvements or even new parks. This reallocation of property taxes would be spread over several years to prevent the sudden impact upon water revenues. We also decided to re-examine the administrative department allocation from the various departments. As we are primarily a water company it was decided that 80% of the administrative allocation should come from the water department, up from the current 62% allocation.

Given the recent surge of expenses related to the sewer project, the LOCSD realizes that this is a very difficult time to be proposing a rate increase. But our lower tier rates have been below the countywide average and we would be fiscally irresponsible if we did not plan for needed infrastructure upgrades to combat seawater intrusion.   The LOCSD appreciates everyone’s efforts to ensure a reliable water supply for Los Osos, learn more about these efforts by attending the next Basin Management Committee meeting at the SB Community Center at 1:30 on Wednesday, May 17 or by visiting the slocountywater.org  website (scroll to the lower right corner).  The proposed water rate increase will be discussed at every LOCSD board meeting leading up to the June 15 Public Hearing.

Sincerely,

Chuck Cesena
Director, Los Osos CSD
Chairman, Utilities Advisory Committee