San Mateo County public works staff told residents at a community meeting that they plan to ask the Board of Supervisors to set a public hearing on March 24 for proposed new water rates for County Service Area 11, the small Pescadero water system.

Christophe Litsai, deputy director overseeing engineering and resource protection, said staff are proposing a five‑year package that would raise monthly charges roughly 22% per year and preserve a tiered rate structure designed to encourage conservation. "Our proposed rates are actually below that threshold" of recent utilities inflation, he said, while also noting the increase is meant to cover operations, repay outstanding loans and fund a minimum reserve.

Why it matters: CSA 11 is a small coastal system with about 102 active connections. Staff told residents the system’s beginning fund balance is low (about $12,894) and that even with the proposed increases the system will run short in early years and likely require an additional loan (staff estimated at least $35,000) before reaching near‑break‑even in year three and generating modest reserves by year five.

Staff presented specific impacts: a typical CSA 11 residential customer who uses 10 units (a unit = 748 gallons) now pays about $54.90; under the year‑one proposal that bill would rise to $66.96, an increase of about $12 per month. Litsai also described per‑tier rate changes effective July 2026 and said the monthly meter charge for a typical 5/8‑inch residential meter would increase from $28.00 to $34.16.

Project and finances: staff displayed a five‑year projection that shows expenses exceed revenue in the first two years even with the rate increases, followed by narrow operating parity in year three and larger surpluses by year five. Those surpluses would first repay outstanding liabilities, restore a target minimum fund balance (staff cited a target of roughly $160,000) and then fund capital priorities such as a meter‑replacement and smart‑meter program.

Infrastructure note: staff said the county successfully bid a separate, 100% grant‑funded Pescadero High School waterline extension estimated at $4,191,000. "The project will install about 1.27 miles of 6‑inch PVC water main," Litsai said, adding the extension is approved only to connect essential public facilities (the school and an adjacent fire station) and will not open the line to additional private connections because of local coastal permit limits and limited CSA 11 supply.

Service options and long‑term supply: staff reviewed alternatives for operating the system — maintain DPW operation (status quo), contract with a third‑party operator (would require permit transfer), pursue consolidation with nearby agencies (staff said neighboring agencies were reluctant or infeasible due to distance), or work toward forming a community services district (CSD) governed locally, which would require LAFCO review and voter approval. On longer‑term water supplies, staff cited a May 2024 screening analysis that identified six alternatives and noted the system currently lacks funds and staff capacity to pursue in‑depth feasibility work without additional grants or loans.

Public questions: residents raised concerns about connection eligibility, the longevity of the aquifer, website accessibility for documents, commercial versus residential usage breakdowns, and customer service billing practices. One resident said the project website was "really hard to navigate," and staff offered to email direct links and noted FAQs and reports are posted online. On aquifer life and risks, staff said studies vary — some project 30–40 years, others longer — and warned saltwater intrusion would raise treatment costs for any alternative supply.

Next steps: staff said they will ask the Board of Supervisors on Jan. 13 to schedule a Prop 218 public hearing for March 24 at 9 a.m. in the board chambers at 500 County Center in Redwood City. Prop 218 protest notices will be mailed about 45 days before the hearing; staff explained the protest rules (one protest per parcel; undeveloped parcels inside the CSA boundary count for protest calculations; written protests are required and must include APN or service address).