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City Council adopts water rate increases, expands low‑income assistance program
Summary
After a public hearing and 3,690 mailed Prop 218 notices, the council approved a 5.5% water rate increase for fiscal years 2025–26 and 2026–27 and renamed and expanded the low‑income assistance program from 15% to 20%. Council recorded 369 validated written protests—insufficient to block the increase—and approved the rates 5–0.
The San Luis Obispo City Council on June 17 adopted new water service rates that raise rates by 5.5% in fiscal year 2025–26 and another 5.5% in 2026–27, following a public hearing and outreach that included a Prop 218 mailed notice and translated materials.
Utilities staff said the increases are driven by regulatory compliance costs, rising capital project needs (including storm recovery projects), inflation and the city’s pay‑as‑you‑go approach to minimizing debt. The council also adopted an amendment to the city’s low‑income assistance program—renaming it the Customer Assistance Program and increasing the discount from 15% to 20%—funded from late‑fee revenues permitted under Prop 218.
Utilities Director Aaron Floyd and Utilities Business Manager Julie Ridgeway reviewed the Prop 218 outreach: 20,565 notices were mailed to property owners and account holders. As of 3 p.m. on the hearing day staff counted 430 submitted protests, of which 30 were ruled invalid and 31 duplicates; the city validated 369 protests. That number did not meet the majority‑of‑parcels threshold that would legally block the rate adoption, the city clerk reported, so council proceeded to deliberation and a vote.
Ridgeway explained how the billing structure combines monthly base fees and volumetric charges tied to usage. Staff provided an example of a typical single‑family home (3/4‑inch meter, about 3,740 gallons monthly): adopting the proposed rates would raise the combined average water and sewer bill by about $8 a month in the first year and about $8 again in the next year (the water portion labeled in the hearing as a 5.5% increase). Staff also described the customer assistance program funding: recent outreach and a related rollout of a solid‑waste assistance program helped grow water assistance enrollment from ~240 to 411 active accounts.
On Cal Poly’s role in usage and revenue, staff said Cal Poly has its own Whale Rock share and treats and distributes a portion of water for the university by contract; Cal Poly is also building an on‑campus water reclamation facility (WARF) that will take treated wastewater for reuse on campus. That project reduces future sewer fund revenue to the city because some flows and fees will shift to Cal Poly’s system; staff said they will monitor the WARF schedule and can return to council with rate changes if the project timeline shifts.
Public comment included property owners and business representatives. Steve Barish, past president of the San Luis Property and Business Owners Association, urged staff to analyze Cal Poly’s contribution to system use and to examine the cumulative effect of repeated rate adjustments. Rachel Whelan, governmental affairs coordinator at the San Luis Obispo Chamber of Commerce, said the Chamber supported the proposed rate adjustments and urged more recycled water use, expanded purple‑pipe infrastructure, finer‑grained tiering to encourage conservation, regional water sales options and stronger public education.
Councilmember Marks moved adoption of staff’s recommendations; the motion was seconded and approved in a 5–0 roll call (Councilmembers Francis, Boswell, Marks, Vice Mayor Shoresman and Mayor Erica A. Stewart voting yes).
The council also found the actions statutorily exempt from CEQA as part of the rate adoption materials and directed staff to continue public outreach and monitoring of factors (including the Cal Poly WARF schedule) that could affect revenues or future rates.
