Protest vote falls short in Morro Bay; water and sewer rates set to spike

Sep 12, 2018

Morro Bay water and sewer residential customers will be paying up to $41 dollars more a month for service, starting next summer. On Tuesday night, the Morro Bay city council voted to raise the rates, after counting the results of a community vote. Those opposed to the rate increase were short by an estimated 636 protest votes.

The city of Morro Bay must build a new wastewater treatment plant, and aimed to add a "surcharge" to customer bills in order to pay for it. 

Under California’s Proposition 218, property owners get to vote on proposed municipal utility rate hikes. If 50 percent plus one of all property owners send in a letter of protest, city officials can’t raise rates.

According to Morro Bay city manager Scott Collins, the city received over two thousand protest votes over the past 45 days.

“It's a big number,” Collins said. “I think last time, there were about 900 that were submitted in the 2015 rate increase.”

But it wasn’t enough, the council deemed, and voted to move forward with the plan to build a new treatment facility.

The surcharge the city will be levying to pay for a new wastewater treatment plant will be in effect until the project is paid off, estimated to be 30 to 35 years. It’s not categorical the increase will be as high as $41. That’s the maximum the city can charge, but Collins said the city will make every effort to knock that amount down.

“The council has asked [staff] to come back with a review process where we look at our costs really closely every year,” Collins said. “If they're lower than we thought, maybe we can reduce our rates if we get a grant, or if we get the loan from the State Revolving Fund, which is a really low interest rate. It could substitute the higher interest rate loans that we have to take on and could save up to five or ten dollars a month. That is not immaterial; that is meaningful to people.”

Next steps in the project, said Collins, are completing negotiations with the city’s preferred vendors for the facility—Black & Veatch and Filanc. Groundbreaking isn’t expected until late next year at the earliest. The new rates kick in on July 1, 2019.