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Proposition 218

May contain: landscape, nature, outdoors, scenery, panoramic, and soil
Proposed rate increases will fund capital projects and major maintenance

Quick Facts about the Proposed Rate Increases

  • Board Approval to Initiate Proposition 218: March 17, 2022
  • Proposition 218 Notices Mailed: April 1, 2022
  • Proposition 218 Hearing Date: May 19, 2022
  • Protests Needed to Prevent Proposed Rate Increases: See table below
SewerWaterPass-Through Inflation Adjustment

June 23, 2022 Hearing and Supplemental Notice

This hearing is being held to consider proposed rate increases for commercial customers with meter sizes 1-inch and larger. For more information about this hearing and the supplemental notice, please read our FAQ.

  • Supplemental Proposition 218 Hearing Date: June 23, 2022
  • Protests Needed to Prevent Proposed Rate Increases: 32
CCSD Supplemental Notice for Commercial Customers with Meter Sizes 1-inch and Larger


What is Proposition 218? 

Proposition 218, which was adopted by the voters in November 1996, added Article XIIID to the State Constitution and governs the process for property-related fee increases. Proposition 218 gives taxpayers the right to vote on all local taxes, and requires taxpayer approval of property-related assessments and fees, including water and sewer rates for CCSD services. Under Section 6 of Article XIIID, a notice must be sent to all property owners and customers at least 45 days before a public hearing is held to consider proposed rate increases. If no majority protest exists, the proposed rates could be considered for adoption.

2022 Rate Study and Proposed Increases 

To properly understand CCSD's enterprise fund finances and to plan for current and future requirements, the Board approved an Agreement for Consultant Services with Bartle Wells & Associates at its August 19, 2021, regular meeting and August 27, 2021, special meeting. At its November 18, 2021 regular meeting, the Board received the final report from PG&E for its Investment Grade Audit (IGA) to execute upgrades to the wastewater treatment plant as part of the CCSD's ongoing Sustainable Solutions Turnkey (SST) program. The CCSD has also been working on a Water Meter Upgrade project, as well as other Water & Water Reclamation Facility (WRF) projects. At its December 9, 2021 regular meeting, the Board received a presentation from Bartle Wells Associates regarding updated financial projections for the CCSD enterprise funds (water and wastewater). The presentation concluded that, particularly for the wastewater enterprise fund, current rates were inadequate to support loan applications to finance critical capital improvement projects, such as those identified in the IGA. Following the presentation, the Board authorized Phase 2 (Section 2, Tasks C and D) of the Proposal for Water & Sewer Financial Plan and Rate Updates dated August 5, 2021 and directed the consultant to proceed with a rate study for the enterprise funds. 

The CCSD Finance Committee met in a special meeting on March 15, 2022 and passed a motion by a vote of 3-0 recommending that the Board accept the proposed financial plan, rate study, three-year rate increases for Water and Wastewater funds, and subsequent inflationary rate adjustments for Water, WRF, and Wastewater. The Finance Committee also passed a second motion by a vote of 3-0 recommending that the Board discuss and consider reviewing the rates to front-load the Wastewater Fund increases to 9% in the first year, 7.5% in the second year, and 6% in the third year.

On March 17, 2022, the Board received a presentation from Bartle Wells regarding Water, WRF, and Wastewater rate recommendations, and directed staff to commence the Proposition 218 noticing process. The Board also voted to set a hearing date of May 19, 2022. Protests received prior to the close of the hearing will be tallied. If no majority protest exists, the Board may consider approving the proposed rate increases, as described below.

Proposed Water Rate IncreasesProposed Sewer Rate IncreasesProposed Inflationary Pass-Through Rate Adjustments (Years 4 & 5)
 6% effective 7/1/20227.5% effective 7/1/2022TBD* effective 7/1/2025 
 6% effective 7/1/20237.5% effective 7/1/2023TBD* effective 7/1/2026
6% effective 7/1/20247.5% effective 7/1/2024

*Pursuant to California Government Code Section 53756, CCSD is also proposing to authorize future annual inflationary water, water reclamation facility, and sewer rate adjustments for an additional two years after the three years of proposed rate increases. These future rate adjustments would be subject to a maximum annual increase based on the percentage of change in the Consumer Price Index (CPI) for California from the most recent December-to-December period at time of implementation.

Projects to be Funded with Rate Increase Revenue 

Wastewater Projects

Sewer Fund Base Project from IGA Report

May contain: handrail, banister, and railing
Return Activated Sludge (RAS) Pipes and Pumps at the WWTP

o   Flow Equalization, including tank refurbishment (See section 3.1, p. 13)

o   Influent Lift Station Improvements, Baffle plate only (See section 3.2, p. 18)

o   Modified Ludzak-Ettinger upgrade (See section 3.3, p. 18)

o   Blower Improvements (See section 3.4, p. 24)

o   RAS/WAS improvements (See section 3.5, p. 27)

o   Electrical Upgrades (See section 3.7, p. 29)

o   SCADA (See section 3.9, p. 31)

o   Secondary Water (3W) improvements (See section 3.6, p. 29)

Including pads for electrical projects, final design, project duration/general condition costs, and the sewer portion of the IGA costs, the total for the above projects is estimated to be $7,527,063 (see p. 34).

Additional Sewer Fund Measures from IGA Report

o   Additional lift station improvements (See section 5.1, p. 38)

o   Sludge storage improvements (See section 5.2, p. 39)

o   Tertiary treatment

o   Lift station improvements, Lift Stations A, B4, 4, 8 only (See section 5.3, p. 40)

o   Storm drain

​The estimated costs of the additional sewer fund measures is $4,541,862 (see p. 43).

Water Projects

May contain: machine
One of the pumps at the Leimert  Booster Station 

Water Fund Measures from IGA Report.

o   Well sites (See section 6.1, p. 44)

o   Booster stations (See section 6.2, p. 47)

o   Domestic Water Tanks (See section 6.3, p. 52)

The estimated total for the above Water Fund Measures is $4,893,836 (see p. 54).

In addition, the Water Department is continuing to research vendors and financing for its Advanced Metering Infrastructure project, which is anticipated to cost upwards of $1,750,000 when installation services are included. Please refer to the agenda and minutes of the August 12, 2021 regular Board meeting, item 7.B., for more information.

Operations & Maintenance

Like all agencies, CCSD faces ongoing cost inflation for a wide range of expenses such as staffing, insurance, utilities, supplies, etc.  Cost inflation for utility enterprises has historically been higher than that for typical consumers.  Small annual rate adjustments are typically needed every year to keep revenues in line with cost inflation and keep rates from falling behind the cost of service.

Frequently Asked Questions (FAQ) 

New Q&As are included in red font at the end of this list.

Who receives a Proposition 218 notice?

All active CCSD customers and property owners whose properties receive CCSD water or sewer service will receive a Proposition 218 notice. If you own multiple properties in Cambria, you may receive more than one notice. If you did not receive a notice and wish to have a hard copy mailed to you, please complete the form at the bottom of this webpage. Accounts that are started between the time notices are mailed and the hearing date will receive a Proposition 218 notice upon account activation. On April 1, 2022, 4,455 notices were mailed.

What does the notice have to contain?

Per Section 6 of Article XIII D of the California Constitution: 

“The agency shall provide written notice by mail of

  • the proposed fee or charge to the record owner of each identified parcel upon which the fee or charge is proposed for imposition,
  • the amount of the fee or charge proposed to be imposed upon each,
  • the basis upon which the amount of the proposed fee or charge was calculated,
  • the reason for the fee or charge,
  • together with the date, time, and location of a public hearing on the proposed fee or charge.”

Who can protest the proposed rate increases?

Any record owner or customer of record who is subject to the proposed utility charges, which are the subject of the public hearing, may submit a written protest to the CCSD. For definitions of “record owner” or “customer of record” please consult Resolution 14-2009 in the “Related Documents” section below.

How will the protest forms be handled?

Protest forms are maintained in a secure, locked box at the CCSD Administration Office. Protests are maintained in confidence until tabulation begins following the public hearing. Once a protest is opened during tabulation, it becomes a disclosable public record, as required by state law. The CCSD will retain a neutral third party to serve as Protest Official during the tabulation. The Protest Official will determine the validity of all protests. Validity criteria are included in Resolution 14-2009, which can be viewed in the “Related Documents” section below.

How many protests are needed to stop the rate increase from moving forward?

o   Sewer APNs: 1923 (3845 total, divided by two, plus 1, rounded down to the nearest whole number)

o   Water APNs: 1975 (3949 total, divided by two, plus 1, rounded down to the nearest whole number)

Because the inflationary pass-through adjustments in years 4-5 of the proposed rate increases affects both water and sewer APNs, the lower of the two protest counts is required: 1923.

There are 4,034 CCSD customer accounts. Why is the protest parcel count different?

Only one protest is counted per parcel. More than one CCSD customer account can exist on a single parcel. For example, parcels with multi-family units are typically individually metered, resulting in multiple CCSD accounts on the single parcel. Therefore, the number of accounts does not equal the number of parcels receiving CCSD utility service. Furthermore, not every parcel in the CCSD service area receives both water and wastewater service. The CCSD has fewer wastewater rate payers than it does water rate payers due to the location of our sewer infrastructure. For example, many homes in the Leimert neighborhood are on individual septic systems. This is why the parcel count for proposed sewer rate increases is smaller than the parcel count for proposed water rate increases.

What is a Pass-Through Inflation Adjustment versus COLA?

While technically not exactly the same, they are similar in concept.  COLA is a cost-of-living adjustment.  Cost-of-living is defined as the amount of money needed to support a basic standard of living.  Consider, for example, the yearly Social Security Cost-Of-Living Adjustment.

A Pass-Through Inflation Adjustment, such as the one being discussed in the current rate study, is defined by California Government Code 53756.  This is an adjustment for inflation which addresses property related services. California Government Code Section 53757 is provided here for your reference.

What changes were made at the April 21, 2022 Board of Directors meeting?

The Board decided to mail a new Proposition 218 notice for second and third-year water rate increases for the 80 or so commercial ratepayers with 1” or larger meters. This is due to an error in the "Proposed Water Rates" table on page 2 of the notice, which failed to indicate increases in years 2 and 3 for the 1" and larger commercial customer accounts.

Did the date of the public hearing change?

No, the public hearing to consider the rates proposed within the original notice is still scheduled for May 19, 2022. However, a second public hearing will be held on June 23, 2022 to consider the rates proposed in the notice that will be delivered to just those customers identified above who are impacted by the error in the original notice.

Do I need to resubmit my protest?

All valid protests will be accepted. There is no need for those receiving the second Proposition 218 notice to resubmit a protest for the original Proposition 218 notice if they already submitted one. They will have to also protest the second proposed rate increase if they oppose it.

When will the District office be open for ratepayers to submit protests in person?

The office is now open between 1pm and 3pm M-Th and alternating Fridays.

Results of the Proposition 218 Protest Hearing 

May 19, 2022

On May 19, 2022, the Board of Directors held the Proposition 219 Protest Hearing in a hybrid format as part of their regularly scheduled board meeting (view meeting information here). The protest official, Ms. Erica Inderlied, City Clerk for the City of Pismo Beach, was onsite at the Vet's Hall with support staff from the CCSD, including Haley Dodson, Leah Reedall, and Melissa Bland. The hearing was hosted via Zoom with one board member, Director Harry Farmer, also onsite at the Vet's Hall until the close of the hearing.

After the close of the hearing, Ms. Inderlied and Ms. Bland performed a prima facie count of all protest forms received. Ms. Inderlied then reported to the Board that a total of 500 apparent protests were received. She recommended that the Board consider all apparent protests valid but insufficient. The lowest threshold required for full validation of all protests was 1,923. 

As a result, the Board of Directors voted 5-0 to adopt Resolution 32-2022 approving the proposed water and sewer rate increases and pass-through inflationary adjustments.


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