Water and sewer bills in Grover Beach could increase by nearly 20% to make up for a $2 million deficit in revenue, the city announced Wednesday in a news release.
At its Sept. 5 meeting, the Grover Beach City Council learned about the findings from a recent utility rate study, heard recommendations and unanimously instructed the city staff to start the Proposition 218 process, a step in notifying the public about proposed rate changes, the release said.
Prior to the 2023 study, the city conducted rate studies approximately every five years, with one conducted in 2021.
Grover Beach hired Tuckfield and Associates to perform another study this year ahead of the typical five-year cycle for water rate studies due to a deficit in revenues from existing rates and escalating costs associated with capital improvement projects, the city said.
One of those projects is Central Coast Blue, a recycled water project that would establish a high-quality water supply for residents and businesses in Arroyo Grande, Pismo Beach and Grover Beach, the release said.
If Grover Beach keep charging its current rates for water and wastewater services, the city will fall $2 million short of its share of the Central Coast Blue project and other water and wastewater responsibilities beginning next year, the release said.
Grover Beach could raise water, sewer rates
As a result, the consultants recommended an annual water rate increase of 19.7% over the first four years, along with a 4% increase in the fifth year, the release said.
The firm also recommended an annual wastewater rate increase of 19.5% over the first four years, along with a 4% increase in the fifth year, the release said.
Grover Beach’s deficit will only increase in subsequent years, the city said, but if a new rate structure is endorsed and enacted in January 2024, the city can maintain the needed revenue and stay financially sustainable.
Even with these rate adjustments, Grover Beach would have the third-lowest water and wastewater rates in the county, the release said.
The City Council will initiate the public notice process Sept. 25 for the proposed rate changes. A public hearing will be held Nov. 13, during which the council will consider adopting the new rate structure.
If approved, water and wastewater rate changes will take effect in January 2024, the release said.
“Preserving our water resources and sustaining our infrastructure remains a pressing obligation for our community,” Grover Beach Mayor Karen Bright said in the release. “The proposed rate adjustments are integral to securing the sustained fulfillment of our city’s critical infrastructure demands well into the future.”