The Nipomo Community Services District will allow the Proposition 218 protest over a proposed water system merger fee to proceed, but the directors want to know the impacts of three potential fees on Blacklake and Town division residents.

Last week, directors voted 4-1, with board President Mike Winn dissenting, to allow the protest to go forward on a proposed $928 “equity buy-in fee” Blacklake community property owners and residents are being asked to pay to merge the two water systems.

But on a separate 4-1 vote, with Director Larry Vierheilig dissenting, the board asked the staff to determine how that buy-in fee would affect water rates of Town and Blacklake division customers.

In addition, the staff will determine the rate impacts on both divisions' customers of $756 and $1,672 buy-in fees as well as the impacts from operating the two systems independently.

Just what course the district takes will depend on the outcome of the Prop. 218 protest. If 50 percent plus one of the Blacklake customers object to the $928 fee, it could not be enacted.

That would send the district and Blacklake residents back to the drawing board to come up with an acceptable compromise.

Blacklake customers and the district have been at odds over the equity buy-in fee ever since a district consultant recommended Blacklake customers each pay $1,672 to balance the equity both divisions would contribute to a combined water system.

Advertisement

Their objections led the district to recalculate the fee, resulting in the lower $928 figure that was put forward for Blacklake residents to protest.

Winn supported halting the protest proceeding over the $928 fee and starting over with a $756 fee resulting from a calculation method suggested by Director Cliff Trotter.

The $928 fee was derived by a method referred to as the “Trotter proposal” that Trotter has said did not accurately represent the calculation method he had in mind.

“I think this is an equitable argument,” Winn said of the new $756 calculation, which he called the “functional value” of the systems.

He said the new calculation offers sufficient grounds for withdrawing the $928 fee and halting the Prop. 218 protest.

But Director Jim Harrison disagreed, noting the district hired a consultant to come up with what it would cost to make the two divisions' contributions equal, which resulted in an initial $1,672 figure.

“I personally would not support going down to $756,” Harrison said, adding the protest should go forward, and if it fails, the district should hire another consultant to come up with a new “fair and equitable charge.”

“(Blacklake customers) keep saying they want a fair and equitable buy-in, then they come up with a fair and equitable number of $1,” Harrison said, adding he doesn't think anyone in Blacklake would really consider that figure fair and equitable.

But Trotter said hiring a consultant to come up with a new figure would not work.

“If we hire a consultant, he will return to the balance of equity - I'm convinced of that,” Trotter said. “Then we'll be right back where we are now.”

He added later, “What we have is a stalemate, in some respects, and there a remedy here so we can move on.”

But Winn said the fact that Blacklake residents like a figure “can't be the rationale” for defending it as equitable.

Harrison and Director Ed Eby both supported finding out what impacts the various fees would have on customers' rates.

“If Blacklake (customers) pay less, the Town will pay more,” Eby said. “If we drop (the fee) lower, the Town will pay even more. Before we tinker with the numbers, I'd like to see how much more the Town would have to pay.”

Vierheilig said the district should wait until the Prop. 218 process is completed. Then, if the protest is successful, the district can spend the money to analyze the impacts.

“The information might influence the vote,” Eby said.

July 2, 2008