Rate Study 2023

The City of Grover Beach is dedicated to providing safe and reliable water and wastewater services in a cost-effective manner. The City provides water and wastewater service to residential, landscape, and commercial customers. Bi-monthly rates charged to system users (customers) are the primary source of revenue to operate the water and wastewater systems and are used solely for this purpose. Rate revenue provides funding for annual operating and maintenance costs, capital projects to improve water and wastewater infrastructure, administration, and maintaining adequate fund reserves and planning for contingencies.

In order to maintain high-quality utility services and ensure adequate water supply, several water and wastewater system capital projects over the next five years are proposed to be supported by rates. These projects include: 

  • Central Coast Blue Water Sustainability Project (for more information on this project, please go to https://www.grover.org/FAQ.aspx?TID=24 or https://www.centralcoastblue.com/)
  • Water reservoir maintenance
  • Installation of an automated meter reading system
  • Water meter replacements
  • Booster station upgrades
  • Sewer upgrades for both future and existing flows
  • Front Street and South Oak Park Boulevard lift station upgrades
  • Citywide sewer lining projects.

2023 Water and Wastewater Rate Study

Current user rates do not provide adequate funding for long-term operation and maintenance expenses and capital projects for the City’s water and wastewater systems. The City engaged a consultant to perform studies of the City’s water and wastewater funds, and to recommend user rates designed to meet the City’s financial obligations, including operating and debt service costs, funds for needed capital projects, and maintenance of cash reserves. 

The study recommends the City adopt a rate structure that allows for annual water revenue increases of up to 19.7% for years 1-4 beginning in February 2024 along with a 4% increase in year 5 and annual wastewater revenue increases of up to 19.5% for years 1-4 beginning in February 2024 along with a 4% increase in year 5. If this structure is adopted and rates are set at the maximum level each year, the average bi-monthly bill for residential water customers using 15 units per billing period is projected to increase from $94 to $120 ($26 increase bi-monthly or $13 per month). For wastewater customers, the projected increase is from $26 to $31 ($5 increase bi-monthly or $2.50 per month). The combined total increase is from $120 to $151 ($31 increase bi-monthly or $15.50 per month). This total does not include the bi-monthly South San Luis Obispo County Sanitation District charge of $50.98 where there is no change in rates and were not involved in this study. Of note, should the City receive additional grant funding or other funding to offset costs, the City Council has the ability to set water and/or wastewater rates at a lower amount than the maximum allowed.

The rate structures developed in the studies comply with federal, state, and City laws and guidelines. They are consistent with good industry practices and are equitable among the City’s customer classes. At the City Council Meeting on September 25, 2023, the report on these studies was presented which included recommended utility rates through January of 2028. The full Utility Rate Study may be viewed here.

Process/Public Hearing for the Proposed Water and Wastewater Rate Structure 

Pursuant to Section 6 of Article XIII D of the California Constitution, and as approved by the City Council on October 23, 2023, the City has provided written notice by mail of the proposed rate structure to the owner of record of each parcel upon which the rates will be imposed. The notice included the amount of the proposed rates, the basis upon which the rates were calculated, the reason for the proposed rates, as well as the date, time and location of the public hearing before the City Council. These notices were sent in excess of the required 45 days in advance of the December 11, 2023 public hearing. Pursuant to Section 6(a)(2) of Article XIII D, the City will consider all protests against the proposed rate structure. If a majority of the owners of the identified parcels (50%, plus one) submit a written protest, the City cannot implement the proposed rate structure.

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