ATASCADERO — After their April 17 board of directors meeting the Atascadero Mutual Water Company (AMWC) will be raising rates effective on May 15.
Residents will see an average increase of $5.30 on their bills due in June, said the company’s general manager John Neil.
While supply and demand are traditionally understood economic indicators, Neil said the decision was distinct from issues of groundwater supply, which are doing well after a break in the recent drought.
The demand on customer pocketbooks is related to higher finance however as the terms of the company’s bond for the Nacimiento Water Project (NWP) require a certain level of funds held in reserve. The rate increase is both on water use and an NWP surcharge.
In addition to electricity and expected capital maintenance costs of doing business, a press release announcing the rate implementation referenced, “ongoing defense costs associated with the Steinbeck quiet title action.”
In other words, Neil later added, legal fees have been a constant drain on the company’s resources which ratepayers will now unavoidably see in the bottom line.
“It’s been going on for four years now,” he explained. “Water rights attorneys don’t come cheap; and courts are a very time consuming and expensive option for resolving disputes.”
A jury trial in September of 2018 added to those legal costs. To put things in perspective he added, four years is less than half the time similar cases were in dispute in the Santa Maria water basin, and attendees at the April board meeting told stories of some cases lasting 30 years, which could be a lawyer’s entire career.
In addition, he said, the NWP bond was originally calculated on fees for new connections, which have dropped from 157 per year in the AMWC territory when it was first considered to 32 new connections currently.
Upcoming hotel projects may help with that cost, Neil said, but for the moment a surcharge increase staunches the flow of cash out of reserves but does not make them money.
“In addition to the expenses noted,” their announcement read in part, “AMWC’s costs for compliance with government regulations and mandates has increased substantially for programs such as the Sustainable Groundwater Management Act, National Pollution Discharge Elimination System, Unregulated Contaminant Monitoring Rule, annual State Water Resources Board fees, among other government programs.”
The State fee restructuring over the last year, Neil added, dramatically increased their costs as an independent water company by charging them a flat fee for connection numbers rather than the actual cost of inspections which they’d paid previously.
Primarily supplied by the local water basin, AMWC has not drawn on the NWP this year, Neil said, although they did at points through the drought.
“So far we’ve been fortunate this rain year,” he said, noting precipitation, “has come in sporadic periods,” with 0.79 inches so far in May, a far cry from a record 2.77 inches in May 1998.
“It’s recharging the water basin, but,” he said, “the issue we have is low use with fixed and increasing operating costs.”
Similarly to the City-run sewage system, which is looking to implement a service rate increase in August, Neil said residents are still lucky compared to the region’s other ratepayers, with Atascadero’s average bill among the lowest in comparison, and the majority of bills being lower than their average.