A protest hearing on proposed Blacklake sewer rate increases as well as surcharges to cover an interfund loan will be held at the Wednesday, Dec. 10, Nipomo Community Services District meeting.

If more than 50 percent of Blacklake customers protest the increases, the new rates and surcharge could not be put into effect.

District officials said the rate increases are needed to cover operating costs, debt obligations and capital improvements that currently exceed the sewer fund’s annual revenue.

A $275,000 interfund loan is also needed to cover a deficit in the capital improvements fund, and customers would repay that loan either through a lump-sum payment or bimonthly surcharges.

Based on a study by the Reed Group and recommendations from an ad hoc committee, Blacklake sewer rates for single-family homes would rise over the five-year period from the current $80.65 to $107.12, $118.90, $131.98, $138.58 and finally $145.51 by 2013.

Multifamily rates would rise from the current $43.22 to $69.99, $77.69, $86.24, $90.55 and finally $95.08 by 2013.

Nonresidential service charges would also rise by varying amounts, depending upon the size of the water meter.

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To replay the interfund loan, residential, multifamily and nonresidential customers with meters up to 1 inch could make a single $489 payment or pay bimonthly surcharges of $17.83 over a five-year period or $9.69 over a 10-year period.

When the board adopted the financial plan Oct. 8, Blacklake resident Bill Petrick commended the district and Blacklake committees for developing a solution to the problem.

“I don’t like the results, but something needed to be done,” he told the board. “My concern now is that this does not happen again ... .

“Five years ago, this same board and this same rate consultant developed the sewer rates and financial plan that determined the rates would increase 4 percent per year and that the fund was in good financial condition,” he said.

“... Now, four years later, the fund is underwater and the Blacklake community is asked to pay a $489 surcharge plus a rate increase of 40 percent.”

Petrick recommended actual costs be reviewed quarterly and the district should find and correct problems in advance. He also said Blacklake customers should only agree to a two-year rate schedule.

“We went to five years to reduce the financial impact on people and to make it more palatable,” said board President Mike Winn, noting the two-year plan called for 50 percent rate increases each year.

Director Ed Eby said he objected to “calling this a financial crisis; it is a financial plan” the district started developing more than three years ago.

He also said it wasn’t “the very same board” that approved a plan five years ago, noting two of the directors are new.

October 24, 2008