ARCHIVES

ARCHIVES

Committee to study Blacklake water again: New study says no buy-in fee necessary

By Mike Hodgson/Associate Editor

New ideas for attaining financial equity in merging the Blacklake and Town divisions’ water systems prompted the Nipomo Community Services District to form another ad hoc committee last week to come up with a proposal.

It marks the second time the district has created such a committee to work with Blacklake customers to solve financial issues surrounding the proposed merger, which General Manager Bruce Buel noted has been discussed 15 times in two years.

NCSD President Mike Winn and Director Jim Harrison will meet with Blacklake representatives to discuss suggestions that the community pay 15 percent of the operating cash reserves and for all or part of several projects.

Also on the table will be the so-called Fund 700 — made up of developer impact fees — and a new report that says neither division’s rates would rise if Blacklake customers paid no buy-in fee.

In fact, according to the report from consultant Bob Reed of the Reed Group, a merger of the two divisions would result in smaller future water rate increases for the entire district.

Buel noted the Reed report, which outlines 5-year financial plans for separate Town and Blacklake systems and a combined fund, determined no Blacklake buy-in fee would be required for the merger to be “revenue-neutral” to Town customers.

A draft version of the report initially indicated Blacklake should pay 4 percent of the district’s water system operating reserves, or about $60,040.

But Director Eby noted Blacklake customers make up about 15 percent of the district’s customer base, and so should pay 15 percent, or an additional $189,192.

That would require a surcharge of $5.81 per Blacklake customer every two months or a flat fee of $297.47.

“I agree with Mr. Reed’s latest analysis that no surcharge is necessary and that the Town water system benefits by the merger,” said Blacklake resident Bill Petrick, a leading critic of the buy-in fee.

“What I am really concerned with here is the implication that this Reed letter will be the basis of our future water rates,” Petrick said, adding that water conservation, supplemental water and cost controls should be factored into the rates.

Blacklake resident Ian Wallace asked what other expenses are coming up that would affect Blacklake rates.

“I’m concerned there are new or as-yet undisclosed costs in the Town system Blacklake would have to participate in,” he said.

Buel said the financial plan is only a “blueprint” based on the district’s best estimate, adding there are a lot of unknowns that will affect actual future water rates.

“I do not know of any other gorillas in the closet or the room — or elephants, if you will,” Buel said. “We’ve tried to lay out everything that we know of.”

Eby and Harrison both said the proposal doesn’t address Fund 700, and Winn noted that fund has “always been the gorilla in the closet” in the merger issue.

“There are some things I think Blacklake should pay for to make this fair,” Winn said, including the cost of two pipelines linking the water systems and 15 percent of the work needed on Well No. 3 and its tank.

mhodgson@theadobepress.com