Posted inGovernment

May Meeting of NCAC to Address Water Use Development and Fire Insurance Cancellation

Local citizens are aware that at least two major and increasing concerns – water use and fire protection are connected and increasingly problematic.  Both concerns have been the subjects of recent news.

     In the case of water-using development, the California Coastal Commission (CCC) recently issued a demand as a formal Notice of Violation that the County and Cambria Community Services District (CCSD) no longer accept permit applications for any new water-using development.  In its letter to the County, the CCC wrote that it considers all new water-using development to be guesthouses; hotel, motel, or home expansions; accessory dwelling units; and any development that would “lead to an increase in water use on a given site.”

     In its Notice of Violation to the CCSD, the CCC not only enjoined the District to stop issuing “will-serve” letters for any new water-using development but also to retract will-serve letters for properties that lack a Coastal Development Permit.  The CCSD has indicated, however, that it has a legal obligation to serve water to certain properties due to contractual water-service commitments for development put in place before the moratorium of 2001.  

     At the May NCAC meeting, Wednesday May 18, at 6:00 p.m., a public discussion will be convened on the current status regarding the CCC’s Notice.  The NCAC will not take a specific position on the issue, as the CCSD, the County, and the CCC already have expressed their positions.  This will be an opportunity for the public to learn about and discuss the issues, as water use and fire protection will continue to have a major impact on our community.

     The other concerning element in the news related to water is the increasing number of cancellations of fire insurance policies, especially in the agricultural and business sectors within the North Coast area.  To follow up on this, NCAC is planning to have a presentation by a fire insurance industry expert at the June meeting, together with an update on current status and projections.

Posted inGovernment

Are there Risks in Rejecting the Proposed Utility Rate Increases?

Over the last six weeks, CCSD Board members have provided specific information articles regarding the proposed Proposition 218 rate increases.  That information has described the age, condition, maintenance, and replacement needs for our Water and Wastewater (Sewer) Utilities. 

     CCSD’s Utilities must be financially self-supporting enterprises by law.  Service charges are the main source of revenue for each Utility and specific to that Utility.  Water cannot pay for Sewer, and Sewer cannot pay for Water.  Being familiar with the District operating structure and how utility rates are legally controlled provides insight to Board actions.  It is also important for Cambrians to understand operational impacts to District Utilities if the proposed rates are rejected.  In other words, “What do we risk”?  A simple response is the potential of Utility system failures and significant regulatory agency fines.

     Our hard-working and capable Utilities staff maintain these aged infrastructures daily.  They are the front line in recognizing the current risks and impacts of a failed system, while continuing to provide service.  Failure does not mean all components currently needing attention or replacement have broken down.  A loss in one area of Utility processes can easily lead to other impacts. 

     Consider the wide-ranging impacts of a major sewage line or pump station failure.  What effects would there be to community health by loss of sanitary access in our homes or businesses.  What risks would there be for environmental impact?   Or consider the impact to our firefighting capability if an area of the water distribution system loses pressure due to a complete lift pump failure?  Because of age, the ability to address equipment failures has become more difficult.  Supply chain challenges for parts and equipment present added risk for timely replacement materials.  Many of our infrastructure components are so aged and outdated that replacement parts are no longer available, adding another complexity.

     Wastewater (Sewer) System Impact.  This is the primary area of risk for the District.  Rate increases would provide the yearly debt service revenue to support the $12 million of critical repair, replacement, and enhancement projects.  These identified projects were determined through a focused assessment of Cambria’s Wastewater Treatment plant and auxiliary systems over the past several years.  The assessment also concluded that, if these requirements are ignored, the Sewer System is and will remain in a vulnerable condition and will be at risk of operational failure.  

     Without the proposed rate increase, the District will be unable to obtain needed funding.  The District could not undertake the necessary projects to prevent the risk of operational failure.  If there were a significant failure which CCSD could not address financially, the County would step in and assume authority for the District wastewater services.  If the experience of Los Osos Community Service District is an indication, any loans the County would obtain to address the repair and replacement needs of the Cambria Wastewater Plant would be sustained by our community through property tax assessments.  In addition, the Utility’s revenue needs would be evaluated and adjusted to meet operational and maintenance needs.   Rate increases would result.

     Water System Impact.  Our Water Facility is in a similar state of age and continues to require ongoing rehabilitation and replacements. The highest impact for failure and cost risk is within the 66.7 miles of underground water main pipelines from the 1960s and 1970s.  Cambria’s rollercoaster topography contributes to the constant repairs and replacements due to age, leaks/breaks, and root intrusion.  It is common that line replacement or repair has additional cost in road repair. The recent loss of our community’s main water supply line from the San Simeon wells is a case in point for age failure.  It also highlighted that infrastructure failures are expensive.  The emergency fix of that line cost $400,000 with the outstanding permanent repair expected to be upwards of $2 million.  

     Water’s capital improvement needs lie in the supporting infrastructure, particularly in potential failure of booster stations which lift water to our storage tanks through eight pressure zones.  The assessment also identified replacement of well pumps at the San Simeon and Santa Rosa well sites.  In addition to facility and infrastructure needs, there is a much-needed Water Meter Replacement Program. The meters are past their life cycle and have been failing.  When a meter fails, data must be read manually. Failing meters also may be sporadic and recording inaccurately.

     The District has been truly fortunate to have Water and Wastewater Utilities staffed by knowledgeable and proficient professionals.  They have been able to creatively and effectively work through equipment issues and failures for several years.  We need to reduce failure risk and not be complacent in thinking things can continue to be addressed with short term fixes and repairs.  As a community, we need to take responsible, proactive steps to fund the needed repairs and equipment upgrades.

Posted inGovernment

Cambria’s Water and Sewer Infrastructure

We turn on our faucets and water flows, but how does it get to our homes and businesses for us to use? And when it goes down the drain, what steps does our wastewater go through to get it to the sewer plant for treatment and beyond?  Our water and wastewater infrastructure systems are complex and have many components, all of which require constant monitoring, maintenance, repair, replacement, and updating, as well adherence to a multitude of regulatory requirements.

      Cambria gets its water from the San Simeon Creek and the Santa Rosa Creek aquifers.  The amount that can be pumped from those two aquifers is regulated by the State of California.  The majority of our water comes from the San Simeon Creek aquifer, where there are three potable water production wells.  The Santa Rosa Creek aquifer has two potable water production wells.  The water goes through filtration and chlorination at the well pump stations, and the water from the Santa Rosa wells get additional filtration treatment for iron and manganese. The water then travels under pressure to six water storage tanks, located on higher ground than the homes the water serves, with three booster pump stations helping to lift the water up to those tanks, and eight pressure zones. The total capacity of those tanks is 1.7 million gallons. There are 66.7 miles of aging water main pipelines that were put in the ground in the 1960s and 1970s, traversing along our hilly topography.  These require maintenance and eventually will require replacement due to their age and leaks/ breaks with some mains needing to be upsized to better handle fire flow.

     Water main line control valves along those water pipelines isolate the areas where leaks/breaks occur while repairs are being done. There are smaller pipelines attached to the water main lines.  These smaller lines go to the meter vault at the curb, and then our homes and businesses connect to the water meters within those vaults.  When our faucets are turned on, the water is sent into our homes via gravity. As the water gets used, the wells continue to pump water to keep the tanks full.  There are 4,033 water service connections in Cambria attached to the water main system.  Cambria also has 369 fire hydrants.  Hydrants and control valves are kept track of using a geographic information system (GIS).  The Water Department maintains a log of when and how often the fire hydrants have been exercised and flushed.

     What happens when the water and waste go down the drain?  Our sewage flows out from our homes into the more than 59 miles of sewer lines and mains, most of which were originally installed back in the late 1960’s to early 1970s.  Ten sewer lift stations are located in various areas around the community to help boost the flow of sewage on its way to the wastewater treatment plant.  Along the main sewer lines there are approximately 1270 manholes through which our wastewater collection workers can inspect the lines using a sewer inspection camera system and a vactor truck to help clean out the lines.  These sewer mains also are prone to breaks, leaks, and blockages due to the age of the collection lines, as well as from the intrusion of tree roots.  Once the sewage reaches the wastewater treatment plant, it is processed, treated, and disposed of.  There are many steps to this treatment of our wastewater, a full description of this process can be found on the CCSD website (  After the wastewater has gone through all the many steps involved, the remaining secondary treated effluent flows to the effluent pump station where it is pumped through a 2.5-mile effluent discharge pipeline to four effluent percolation ponds located off San Simeon Creek Road.  These percolation ponds create a berm to help prevent seawater intrusion and lower the gradient of the well fields so the District wells can have access to the upstream flows for a longer time period.

     Our Water and Wastewater Departments are staffed by experienced and highly trained professionals who work very diligently to operate our systems in a safe, environmentally sensitive, and economical manner. While previous rates have helped balance out the water and wastewater enterprise funds and accomplish some capital improvements, the availability of enough funds needed to do the major and very critical capital improvements is limited, especially for our wastewater system.  Much effort and funds have had to go to maintenance and repair as aging components wear out or break, in order to keep water flowing and our wastewater system working in a safe and reliable manner for our community. The proposed rate increases for water and wastewater will help address many of those very critically needed capital improvements, upgrades, and repairs.  To see a list of projects to be funded through these rates, please reference the CCSD website (

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Understanding Inflationary Rate Adjustments and Why They are Being Proposed

Why are inflationary rate adjustments being requested?  Inflation is always with us.  Some time periods of increase are higher than others.  Inflation is a rise in the cost of goods and services. When the general price level rises, each unit of currency buys fewer goods and services.  The effect is a reduction in the purchasing power of money.

     Our District, like all other special districts that provide water and/or sewer services, can only obtain the monies to provide and maintain those services through the rates charged to the users of the services.  The current Proposition 218 rate analysis has included estimated inflation as part of the overall rate assessment and development.  That will address the effect of inflation for the next three years.

     Where the potential impact of not adjusting for inflation comes into the picture are time periods after the proposed rate increases.  For every year there is no inflationary rate increase, the impact of inflation will actually reduce the value of the yearly revenue of those rates generated for Years 1, 2, and 3.  The District would be in the cycle of two steps forward, one step back in every subsequent year.   To address this impact, this Proposition 218 process, as expressly permitted by Government Code Section 53756, is also proposing an inflationary rate increase for Water, Water Reclamation Facility (WRF) and Sewer for Years 4 and 5.  Note that this inflationary rate increase in Years 4 and 5 is the only increase being proposed for the WRF. 

      What Does an Inflationary Pass-Through Mean?  Based on California Government Code Section 53756, An agency providing water, wastewater, sewer, or refuse collection service may adopt a schedule of fees or charges authorizing automatic adjustments that pass-through increases in wholesale charges for water, sewage treatment, or wastewater treatment or adjustments for inflation.  CCSD is proposing to authorize future annual inflationary Water, WRF, and Sewer rate adjustments for an additional two years after the three years of proposed rate increases.

     Most people are used to hearing the terms “Inflation” and “Consumer Price Index (CPI)” but are not familiar with the difference between the two.  The Consumer Price Index is a measure of a segment of inflation, as experienced by people in their day-to-day life.  It is a measure related to the consumer’s daily expenses (the average price by which a consumer buys the household things).  CPI is an index which is part of inflation just like GDP, cost-of-living indices, producer price indices (PPIs), commodity price indices and core price indices.

     Government Code Section 53756(b) provides that “The schedule of fees or charges may include a schedule of adjustments, including a clearly defined formula for adjusting for inflation.”  In the proposed rates, the future rate adjustments would be subject to a maximum annual increase based on the percentage of change in the CPI for California from the most recent December-to-December period, at time of implementation.  The important part of this statement to understand is “percentage of change in the Consumer Price Index.”   The Inflationary Rate Adjustment would not be the current inflation rate.  It would be the difference between the prior year’s CPI (averaged over 12 months), and the most recently completed calendar year’s CPI (average over 12 months).  The difference between the two CPIs represents the “percentage of change” for the most recent December-December period.

     The currently proposed Proposition 218 Inflationary Rate Adjustments for Years 4 and 5 would go into effect on July 1 of 2025 and then on July 1 of 2026.  An adjustment implemented on July 1 of 2025 would be based on the percent change of the CPI from its annualized position at December of 2023 to its annualized position at December of 2024.

     Deferral of a future inflationary rate adjustment can be made up in a subsequent year.   If the adjustment for July 1 of 2025 is deferred for a year, it can be added to the adjustment for July 1 of 2026.  The proposed inflationary rate adjustments will be subject to future review and approval by the Board of Directors.

     Please note that the “Inflationary Rate Adjustments” in the Proposition 218 Notification were not presented as part of the proposed three-year rate adjustment for Water and Sewer rates.  The Proposed Inflationary Rate Adjustments (Years 4 and 5) were identified as a singular proposed action for Water, Sewer and the Water Reclamation Facility, on the “PROP 218 WRITTEN PROTEST FORM.” 

Posted inGovernment

How will the Proposition 218 Protest Forms be Counted? (Part IV)

Today I would like to provide a brief description of how your District is planning to tabulate the written protests of our proposed water and sewer utility rate increases.  Hopefully this discussion will help to resolve some of the important concerns that many of you may have.

     For background:  Proposition 218 requires that the CCSD must give our rate payers and/or the property owners that we serve the opportunity to submit a written protest of any increase to our utility rates.  According to law, the written protests must be tabulated at a properly noticed public hearing.  Protests may be submitted to the CCSD Administrative Office any time before the public hearing is convened.  Furthermore, written protests may be delivered by hand to the District at the public hearing until such time as the public hearing is formally closed.

     It is important to note that the written protests must contain certain very specific pieces of information.   To ensure that all written protests we receive contain all the information required in order to be counted, we have provided you with protest forms for you to use.  These forms were sent out with the formal Proposition 218 notice of the proposed rate increase.  You also can download a protest form from the CCSD website at:

     Some of you would like to go into the office to hand in your protests.  We are deciding how to accommodate you.  Please check the CCSD website for the hours when the District office will be open.  Please note that District staff will not be making copies of your protest forms.  If you want to have a date-stamped copy for your records, you will need to bring your own copy with you.

     The Proposition 218 notices were mailed to the addressed of the billing accounts as shown on our records and to the property owners’ addresses from County records.  If notices are returned by USPS as undeliverable, the District will make every effort to resend them.  If you have not received your notice, please call the CCSD office to verify your address.

     At the public hearing:  The hearing will be formally opened.  There will be a call for public comment.  After all public comment has been heard, there will be a last call for any outstanding protest forms.  After all protests have been received, the public hearing will be formally closed, and the tabulation process will begin.  The City Clerk from Pismo Beach will be doing the protest count and validation, as had been done for a previous Proposition 218 protest hearing in 2018.  The count will be conducted in person at the Veterans’ Memorial Hall (1000 Main Street) with a remote option for those who are not comfortable attending in person.  Note that, according to statute, when tabulating the protests, we can count only one protest per parcel served.

     More information is available at:  Under the link, “Documents,” you can find “Resolution 14-2009,” which explains the guidelines and procedures for the Proposition 218 protest count.  I hope you find this short article helpful at resolving some of your concerns.  We at the District are making a sincere effort to be as transparent as possible as we go through this process.  In that spirit I invite you to share your questions and concerns with me by email at:  We will attempt to address them.

Posted inGovernment

Understanding the Proposed Utility Rate Increases (Part III)

As recommended in the recent 2022 Bartle Wells study, the CCSD is proposing to increase water rates by 6% each year for three years, followed by an inflation pass-through rate adjustment for years four and five.  The inflation adjustment would be pegged to the Consumer Price Index for California.  Note that your CCSD has not had any rate adjustment since July of 2020.  At the very least, small annual rate adjustments are needed every year to keep revenues in line with rising costs and, so, keep rates from falling behind the cost of service.  Please remember that by law, the CCSD’s utilities enterprises must be financially self-supporting enterprises, and that service charges are the main source of revenue for each utility.

     What Needs will be Addressed with this Proposed Rate Increase?  The District’s water system facilities are aging and continue to require ongoing rehabilitation and/or replacement.  These facilities include many miles of water transmission and distribution pipelines, water storage tanks, and water pump stations.    Our water rates need to support an adequate funding stream to enable CCSD to address existing deficiencies, meet regulatory requirements, and support safe and reliable service.

     In addition to capital improvements and routine maintenance and repairs, the District also must be able to respond to unanticipated emergency events, such as the recent San Simeon water transmission main failure in December of 2021. That failure resulted in construction of an above-ground bypass costing more than $400,000.  Furthermore, the permanent underground replacement still needs to be undertaken at a significantly greater cost.  

     The proposed rate increase will help fund our yearly capital needs going forward, estimated by CCSD staff to average $500,000 a year.  In addition, the rate increase will support the costs of a much-needed water meter replacement program, via a lease with annual payments totaling an estimated $1.7 million over a 10-year period.  The proposed rate increase also enables the Water Utility Enterprise to repay a long-outstanding loan to the General Fund.  Repayment of this loan is an important step in addressing an internal alignment and financial commitment of the Water Utility.  

     Finally, a small portion of the rate increase will continue to build reserves.  Building reserves for the District Water Utility Enterprise is important and no different than what you may do as a homeowner to build savings for an eventual roof replacement on your home.  You do not wait until the roof fails to protect yourself.  The CCSD reserve needs are greater because the exposure, risk, and impact of failure is much more significant.    

     What about the Prior 2018 Rate ImplementationAs a reference, Cambria’s water rates were increased by 15 percent in November of 2018, 6 percent in July of 2019, and 6 percent again in July of 2020.  During that three-year period, the District’s Water Utility Enterprise has expended $387,115 on capital improvement projects (CIP) and $1,717,728 on maintenance and repair (M&R) services and supplies (exclusive of salaries and benefits).   Note that the amount spent on M&R services and supplies is nearly 4.5 times the amount spent on capital improvements.  This fact is an indication of how much of our ageing infrastructure needs replacement.

     Examples of completed CIP and capital assets purchased during this timeframe included:   trailer mounted vacuum extractor, air compressor and jack hammer, dump truck replacement, initiation of Zone 2 to 7 transmission main Santa Rosa Creek pedestrian bridge, SCADA System L/T water portion, San Simeon well field generator replacement, and pump replacement.

     Budgeted CIP projects for the fiscal year 2021/22 timeframe include:  completion of SCADA System – Phase II, completion of the Zone 2 to 7 transmission main Santa Rosa Creek pedestrian bridge, Rodeo Grounds pump station replacement (Zone 2 booster station), and continuation of the SCADA improvement project.

     Examples of M&R activities required during the three year period:  production meter testing, water meter repairs/replacements, annual Pine Knolls water tank dive inspection, M&R and flushing of fire hydrants, SCADA system M&R, Leimert booster station repairs, wells and field generator repairs, SR4 well filter replacement, SR3 maintenance, repairs and inspection of water storage tanks, water yard booster station repairs, water leak repairs and associated road repair, water valve repairs, and emergency event and storm damage repairs.

     Note.   My thanks to Directors Cindy Steidel and Karen Dean who have helped me to prepare this article.  As chairs of the CCSD Standing committees on Finance, and Resources and Infrastructure, respectively, they have been intimately involved with the issues.

Posted inGovernment

Understanding the Proposed Utility Rate Increases (Part II)

A copy of the CCSD’s “Notice of Public Hearing on Proposed Increases to Water and Sewer Rates” (the so-called “Prop. 218 Notice”) arrived in my mail today.  If you are a CCSD ratepayer or own property in Cambria, you, too, most likely will have received your Prop. 218 Notice by the time you read this.  This article is the second in a series intended to supplement, amplify, and/or clarify the explanations provided with the Prop. 218 Notice.

     I hope that these articles will help you to understand the rationale behind the proposed rate increases.  If you have questions or topics you would like me to address in future articles, as always, you can email me at  Today we focus on the wastewater (sewer) rates.  Water rates will be discussed in next week’s article.  For more detailed information about the 2022 Wastewater Rate Study and the proposed rate increases, please visit the district website at:

     Cambria is a wonderfully unique community with many positive attributes.  Unfortunately, some of those unique qualities also create challenges related to utility services.  The incredible canyons support abundant wildlife and the hills rising from the sea provide beautiful vistas, but that topography also creates a very complex and challenging environment for our utilities.  Except for some straight runs on Moonstone Beach and Main Street, the major part of Cambria could be likened to a roller coaster.  As such, we have many complex points for both Water distribution and Wastewater retrieval.

     When you consider the complexity of our system, the advanced age of our utilities and the underlying miles of piping and gravity lift stations you can begin to understand the challenges CCSD faces in keeping things operating successfully and seamlessly, while also handling emergency circumstances as they arise.  For the good of the community, it is essential that your CCSD have the appropriate systems, equipment, and assets to accomplish these responsibilities.

     Where are We Now?  The Wastewater utility rate increases recommended in the recent 2022 Bartle Wells Study are 7.5% for three years, with a pass-through inflation rate adjustment for years four and five pegged to the Consumer Price Index for California.  By law, the CCSD’s utilities must be financially self-supporting enterprises.  Service charges are the main source of revenues for each utility.   The Wastewater rate increases recommended by Bartle Wells were developed based on a targeted $12 million of critical repair, replacement, and enhancement projects for Cambria’s Wastewater Treatment Plant.  These projects were determined by your CCSD based on a focused assessment of our critical utility needs in the last few years.  The assessment concluded that, if these Wastewater Treatment Plant requirements are not addressed, the plant is and will remain in a vulnerable condition and will be at risk of operational failure.

     Of course, it is totally impractical that any rate level increase could produce $12 million in a short time to address these immediate project needs.  The purpose of the rate increase is to generate revenue which will support yearly debt service to undertake these critical projects for our aging facility.  The $12 million would be obtained through a loan mechanism with repayment over a 30-year period.  To make ourselves eligible for these monies, CCSD will have to demonstrate to the lender that we can support that level of obligation financially.  Implementing these rates is the way that is accomplished.   Without this rate increase, the District cannot obtain lending to do these critical repairs, replacements, and upgrades.   The inability to address these essential project needs would put the Wastewater Treatment Plant operations at risk, with probable impact to the health and wellbeing of the community. 

     What about the Proposed Pass-through Inflation Adjustment?  Even with these steps being taken, there are additional high priority Wastewater projects that need to be addressed.  As these three yearly rate increases help to build revenues, the District will be in a better position to take small steps in addressing some of those needs, as well.  We also will need to assess the criticality of remaining work over time.  Cost elements that will never go away are routine expenses and costs for emergency maintenance and repair.   What it costs to accomplish those activities will not be the same four years from now that they are today.  

     That is why your CCSD Board supported the Bartle Wells recommendation for a pass-through inflation rate adjustment for years four and five.  This type of inflation adjustment addresses property-related services and is defined by California Government Code 53756.  The Code states, “An agency providing water, wastewater, sewer, or refuse collection service may adopt a schedule of fees or charges authorizing automatic adjustments that pass-through increases in wholesale charges for water, sewage treatment, or wastewater treatment or adjustments for inflation.”

     How to Get More Information about our Wastewater Utility Requirements.  The CCSD Board Meeting Agenda Package for March 17 (Agenda Item 8.B, pages 137-139) provides a full explanation of what constitutes the $12 million project content including an excellent recounting of how the Wastewater utility assessment evolved.  The agenda packet can be accessed online (  Just below the board meeting recording, click on the bullet identified as “Agenda”.  

     How were the 2018 Rate Study Increases Applied and Expended?  To address questions from the community on how the prior rate increase was applied, here is some specific information. The three-year 2018 wastewater rate study recommendations (Scenario B) were 20 percent (November 2018), 18 percent (July 2019), and 16 percent (July 2020).  The actual rates implemented by CCSD Board direction were 20 percent (November 2018), 16 percent (July 2019), and 16 percent (July 2020).

     What Funds were Actually Expended for the Wastewater Utility?  Capital Improvement Projects received $607,197 while Maintenance and Repair (M&R), Services, and Supplies received $1,996,454 (excluding salary and benefits for SEIU Wastewater utility employees).  M&R costs are often not obvious or visible to the public because identification, action, maintenance, or replacement occurred before a major problem developed.  There was a long list of important, but smaller dollar value, maintenance activities that repaired/upgraded the plant infrastructure or halted further deterioration.

     The M&R work and expenses covered a broad range of circumstances related to equipment/facility components:  failures, repairs/replacements, upgrades, improvements, implementing technical tools and assets.  A sampling of accomplishments during the period includes major lift station maintenance such as pump repairs/replacement, generator repairs, repurposed effluent surge tank and installed new effluent pumps, influent screen installation and construction of support platforms, manhole raising, handrail repair and replacement, implemented collection system maintenance, implementation of a GIS program to track /document collection system cleaning and repairs, SCADA upgrades and computer replacements, vactor truck to jet flush/clean collection system lines, and a sewer inspection video camera system.

     The prior 2018 Wastewater rate increases detailed above were designed to address infrastructure needs and provide adequate operating and maintenance funding, establishing the utilities on a more stable financial footing.  Revenue obtained over this period has significantly improved and stabilized the District’s Wastewater Treatment Plant operation and maintenance needs.    The District now needs to address funding the most critical capital improvements of its aging infrastructure in order to address existing deficiencies and support safe and reliable service.  

     Note.  CCSD Directors Cindy Steidel and Karen Dean worked together to produce today’s article.

Posted inGovernment

Understanding the Proposed Utility Rate Increases

As most of you may have heard or read by now, your CCSD is proposing to gradually increase our rates for water and wastewater (sewer) service over the next five years.  Naturally, there has been much discussion in the community about this matter.  And, no doubt, many of you have questions and/or reservations about the proposed rate increases.  Over the next several weeks I plan on using this venue to provide you with some short explanatory articles to help clarify the issues and aid in your understanding of some of our current challenges.  If you have questions that you would like me to address in future articles you can email your questions to my district address:

     To help me in this effort to keep you all informed, I have asked Director Cindy Steidel to prepare the following overview of some of the basics about your CCSD’s finances.  (For those of you who may be new to the community, Cindy has been on the CCSD Board of Directors for three years and is currently chairperson of our Finance Standing Committee – a citizens’ committee convened by the Board to advise us on financial matters.)

     CCSD Revenues – Cambria is not an incorporated city, so how do we exist financially?  Our Special District was formed in 1976 through a charter established by the Local Agency Formation Commission (LAFCO) of San Luis Obispo County.  CCSD provides water, wastewater, fire protection, parks, recreation and open space.  Since we are not a city that can impose or collect taxes, how do we get the revenue that allows us to exist?  Well, that depends on what part of the District charter you talk about.  CCSD’s services have two very distinct sources of revenue. 

     First Category of Revenue:  Property Taxes.  Property taxes are assessed and collected by SLO County.  The county Auditor-Controller is responsible for the apportionment and distribution of property taxes using specific formulas and procedures.  The calculated distribution is made to all applicable County Governed Districts, Cities, Special Districts and School Districts twice a year.  This tax revenue received by CCCSD funds everything, except the water and wastewater utilities.  In our budgeting and accounting structure this first category is often referred to as the General Fund Accounts, funding fire protection, parks, recreation and open space.

     Second Category of Revenue:  This specific category relates to the utility operations/services for water and wastewater.  These are our Utility Accounts (also called the “Water Fund” and the Wastewater Fund”).  CCSD’s water and sewer utilities are financially self-supporting enterprises, meaning that service charges are the base source of revenues for each utility.  Our utility rates must adequately meet the operating and maintenance expenses, ongoing capital improvement needs and any debt service (if needed).  CCSD has decades-old utility facilities, including their underlying infrastructure of underground piping and distribution systems.  For instance, the Wastewater Treatment Plant is over 50 years old, with a 27-year-old update.  For our water utility, pipe breaks/leaks and root blockages in our water distribution system are becoming more common.   Maintenance and capital improvement needs continue to be the challenge in managing our utilities.

     How Are These Revenues Financially Managed?   CCSD’s fiscal year runs from July to June. The District applies Generally Accepted Accounting Principles (GAAP) and practices for its financial accounting and reporting.   The State of California requires a yearly third-party Financial Audit.  These audits validate our use of GAAP practices through account research and sampling by an auditor.  CCSD submittals to the State are up to date.  The FY2020/2021 Audit Report is in final.  Internally, the district uses a robust Budgeting process each fiscal year, applies internal review practices (Finance Standing Committee), and Quarterly Budget updates during the fiscal year.  In all cases, the results or recommended actions come to the Board of Directors for their review and authorization at regularly scheduled public board meetings.  

     Transparency.   All General and Special meetings of the Board of Directors as well as Standing Committee meetings are recorded and open to the public.  Documentation of budgets and their quarterly updates as well as submitted Audit Reports are posted on the CCSD website. These can be viewed by selecting “About Us” in the menu headings, then select “Transparency” from the dropdown menu, from the Transparency listings, select “District Financial Information”.