Atascadero council opens Prop 218 notice for proposed wastewater rate increase

The Atascadero City Council voted 4–1 on April 23 to start the Proposition 218 protest process and set a public hearing for June 10 on a proposed wastewater (sewer) rate increase that would take effect July 1, 2025.

City Manager Jim Lewis and public works staff presented the proposal to raise sewer service charges about 18.5% for the coming year — roughly $9 per typical single‑family dwelling — saying the increase is needed to begin funding design, construction financing and reserve requirements for a state‑mandated upgrade of the city’s nearly 45‑year‑old treatment plant. “This does not do anything for the collection system,” City Manager Jim Lewis said, adding that the increase is intended primarily to make the city finance‑ready for a larger treatment plant project.

The council’s action starts the Proposition 218 property‑related fee process that gives customers 45 days to file written protests before the council considers rates. Public works staff said the mailed notice will explain the protest process and that the county property tax roll deadline requires starting the process now to have any approved charges appear on the July property tax levy.

Why it matters: Atascadero’s wastewater system serves roughly 5,500 sewer connections and includes about 63 miles of gravity sewer pipe, some 1,500 manholes and a treatment system staff described as approaching full capacity. Staff and outside consultants told the council the existing stabilization‑pond treatment plant must be upgraded to a modern secondary treatment system under state regulatory mandates; preliminary planning-level estimates discussed in the meeting put design and construction in the roughly $100 million range, with additional potential collection‑system repairs cited as high as about $73 million in participants’ comments.

What staff told council: Consultant Clayton Tuckfield said the city needs revenue to meet operating costs, capital improvements and minimum reserve and debt‑service coverage targets. “What we’re discussing here tonight is increases of 18.5% for 2 years,” Tuckfield said in the presentation, and staff described the immediate action as a one‑year increase implemented July 1, 2025 with an expectation that further adjustments will be required in subsequent years once design and financing are better understood.

Staff described the planned next steps: send mail notices under Proposition 218 this week, hold a public hearing June 10 to receive protests and consider final rates, then work with the county to include approved charges on the property tax roll. Staff also recommended forming an outreach and stakeholder working group to meet with apartment owners, businesses and other large account holders, pursue regional partnerships with neighboring agencies, seek state and federal grant funding and perform additional technical studies — including flow monitoring and a collection‑system infiltration study — to refine project scope and costs.

Public comment and council concerns: Dozens of business owners, property managers and residents addressed the council during the item, urging more public outreach, fairness in how equivalent dwelling units (EDUs) are assigned to apartments and commercial accounts, and relief or mitigation for downtown businesses affected by concurrent construction projects. Several speakers requested additional data from the city (metered usage, parcel‑level billing) and urged more aggressive pursuit of grants and regional partnerships. A few commenters questioned the timing of the increase and said cumulative cost pressures (insurance, construction impacts downtown) made the proposed increase particularly difficult for small businesses and fixed‑income property owners.

Council direction and vote: Council members agreed to begin the Prop 218 process while repeatedly asking staff to pursue cost reductions, regional partnerships and grant funding and to convene community stakeholders to study rate equity and alternatives. The council motion to administer the Prop 218 process and set a June 10 public hearing passed 4–1. The roll call recorded Council Member Funk: yes; Council Member Peake: no; Council Member Newsom: yes; Mayor Pro Tem Darris: yes; Mayor Borba: yes.

Votes at a glance - Motion: “Adopt staff’s recommendation to direct staff to administer the Proposition 218 process and set a public hearing date of 06/10/2025 for the council’s consideration of the proposed sewer service rate increase.” - Outcome: Approved 4–1 (Peake opposed) - Next step: Notices mailed under Prop 218; June 10 public hearing; county tax roll deadline drives schedule

What remains unresolved: The proposed 18.5% action before the council is a one‑year increase starting July 1, 2025; staff repeatedly said further increases will likely be necessary and that design and financing work over the next 12–24 months will refine cost estimates. The council directed staff to begin stakeholder outreach, pursue grants and partnerships and return with additional analysis and public engagement.

Sources: Statements and slides presented by City Manager Jim Lewis, Public Works Director Nick Devar and Public Works Analyst Ryan Betts; rate analysis presented by consultant Clayton Tuckfield; public comments from business owners and property managers recorded on the April 23 council meeting transcript.