Opinion: Reforming utility rates may help solve affordability crisis
Anthony Kalvans
San Miguel leader proposes alternative structure for utility rates
– With the affordability crisis sweeping California driving families and businesses out of state, San Miguel Community Services District Director Anthony Kalvans says he has spent the past four years researching solutions. Kalvans has drafted a new rate structure that he says could reduce utility rates by up to 90% for over 70% of ratepayers in the Central Coast Community.
While the San Miguel Community Services District is actively pursuing a traditional rate structure that would increase rates by 5% a year for most ratepayers, the method Kalvans calls for bases a part of utility rates on lot sizes instead of a fixed flat fee. Kalvans said that the reasoning behind his method was that, “Water and sewer infrastructure is expensive and needs to be maintained even when no one is actively using water. It costs the same to replace one block of pipe whether it has 2 or 20 customers using that same pipe.”
Two models were conducted using Kalvans’ lot sized method. One that would cover only priority infrastructure projects, and one that would cover both maintenance and infrastructure.
For the priority infrastructure model, the average savings were between 3% to 15% for over 70% of the community. However, when the lot sized method was used for both maintenance and infrastructure, the average savings increased between 30% to 90%. The models also showed that
the lot sized method would significantly increase rates for 5% of the ratepayers, who are mostly underutilized lots in the center of town, and would not affect those on private wells.
The method Kalvans proposed was inspired by land-based water rates used across the Central Valley over 100 years ago. Those communities saw underutilized lots subdivide allowing vacant land prices to drop, smaller-scale family farms to thrive, and affordable homes to develop.
Kalvans has noted that to fully adopt his proposed method, a more comprehensive study would need to be conducted. He was also told that some people did not believe the community would support his method. Kalvans says he believes that if someone supports the traditional method the CSD is pursuing or his lot sized method, they should let their voices be heard.
Note: Anthony Kalvans sent this information independently from the San Miguel CSD.
