News - Local

Monday, Aug. 18, 2008

Homebuilders group protests new water rates in Paso Robles

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Having sustained a barrage of criticism from the public over higher water rates intended to pay for its portion of the Nacimiento Water Project, Paso Robles will now tackle another part of its rate plan: connection fees for developers and property owners who want to build homes.

The fees, slated to rise 215 percent under the city’s draft rate plan, have created concern among local builders.

“There’s a lot of charges in there we don’t think are entirely accurate,” said Jerry Bunin, legislative affairs director for the Home Builders Association of the Central Coast.

The city’s plan has connection fees for a single-family home with an average-sized water connection going up to $28,687 in 2011 from the current $9,119. Fees for larger connections for multi-unit projects are higher.

The builders association asked an attorney and a consultant to look at the documents the city used to come up with the new rates. They found numerous discrepancies between two studies prepared for the city by separate consultants, Bunin said, including differences in how much water the average household uses per year and how many households there will be in the city in the future.

According to the builders’ consultant Joanne Brion, using one set of data prepared for the city results in a connection fee more than $10,000 less than what the city has proposed.

The city disputes the findings of the association and its consultants.

In a letter to the association responding to its concerns, Community Services Director Ron Whisenand explained how the calculations were made and said the city believes the numbers it has come up with are accurate, though he acknowledges there may be differences of professional opinion.

The city contends that the rates must go up so that it can pay for its portion of the Nacimiento project, a water treatment plant to handle the water when it is delivered to the city, and future improvements to the water system. Those projects are estimated to cost $210 million.

“The need to implement new water capacity charges to increase revenues is directly related to the requirement to make new development pay for its share of the Nacimiento bond debt payments, treatment plant construction and other conveyance system improvements. If revenues through new capacity charges to pay for new development’s share of those costs are not sufficient, the General Fund will ultimately have to make up any shortfall,” Public Works Director Doug Monn wrote in a staff report on the issue.

When the rates were introduced July 2, the council postponed a decision on the connection fee portion to give city staff more time to meet with the concerned builders.

Several meetings among staff, council members, developers and their representatives have taken place this month.

“We want the most accurate possible fee,” Bunin said. “We want to know what we’re responsible for, and we’ll pay it.”

The city is in the noticing-and-protest period for residential and business water customers, which is required by state law. A hearing is scheduled Tuesday evening on those rates as well.

The new rates are expected to raise the average family’s water bill to $92.88 per month next year from the current $56.40, then to $143.42 in 2010 and $164.64 in 2011.

Under the new rates, the city’s water customers would see the flat-rate portion of the bill, now $18, jump incrementally, to $20 next year and $22.50 the year after that. The per-unit rate would go from $1.28 to $2.56 in the first year, then to $4.22 and to $4.86 in the third year.

The rates differ depending on the capacity of a customer’s water meter.