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Templeton sewer rate increase explained 

Templeton wastewater rates set for increase

By Nanette Fisher
Soaring Eagle Press

TEMPLETON – Last Friday, the Atascadero News printed an article titled, “Templeton biz to pay largest portion of sewer rate increases” and this Tuesday, the lead headline in the Paso Robles Press proclaimed, “Briltz: Templeton businesses hit hardest”.

And other news articles from south county sources have recently proclaimed, “Templeton residents could soon see a hefty increase in their sewer bills each month” and “Templeton’s sewer rates due to increase significantly”.

With Templeton’s current rates one of the lowest in the county, and the proposed rate increase for 2014 putting Templeton in the middle of current county rates, do these headlines and comments accurately reflect Templeton’s proposed wastewater rate increase? Did the articles explain the why and how of the rate increase?
Let’s take a look at a few facts, the proposed increases, and a little history that weren’t included in these dire pronouncements. Then you decide.

Templeton’s rates are based on wastewater flows

Templeton has a dual collection and treatment system. See “How Templeton ended up with a dual system” below.
The town of Templeton has a dual wastewater (sewer) collection and treatment system that collects and sends most everything east of the freeway to the Paso Robles Wastewater Treatment Plant, and a significant percentage of the wastewater produced west of 101 to Templeton’s Meadowbrook Wastewater Treatment Plant. Many of the larger parcels – particularly on the west side – are still on septic systems.

  • The cost to collect and treat wastewater is based on flows through the entire system
  • The baseline flow for both business/commercial and residential sectors is determined by the average internal water usage (total water use less that used for landscaping irrigation)
  • The base rate is calculated on flows of up to 300 cubic feet per month
  • Residential internal water usage is relatively static at that level, but business/commercial internal usage varies from equal to residential flows up to many, many times greater than the baseline

Why do the rates need to be raised?

  • Revenues currently cover only 75 percent of daily operational costs – the wastewater fund is currently bleeding red ink
  • No depreciation fund (savings) currently exists for repair, replacement, or upgrades as the system infrastructure ages
  • Templeton uses up to 9 percent of the Paso Robles Wastewater Treatment Plant capacity and is contractually responsible for 9 percent of the current, in process upgrade to the Paso Plant or close to $5M plus interest
  • Current business / commercial rates do not reflect actual flows for businesses whose use of the wastewater system is above the baseline – adding to the ongoing deficit in operational and aging infrastructure maintenance costs

What is reflected in the proposed base rates?

  • The base rate for both businesses and residences is the same
  • The base rate increases over a 5 year period to bring both daily operational costs and a depreciation “savings” account to fund aging infrastructure maintenance in line with actual and projected costs over that 5 year period for the system that is currently in place
  • A monthly debt service override is added to all flows (for both the base rate and to flows over the base rate) to capture Templeton’s share of the costs to upgrade the Paso Robles Wastewater Treatment Plant

How do the proposed rates reflect flows to the system that are greater than the base flow?

  • Remember – Templeton’s rates are determined by flows put through the system
  • If a business or commercial enterprise generates more internal flows than the base flow (up to 300 cu ft per month) the rate charged will reflect those greater flows
  • For each additional 100 cu ft of flow, business and commercial enterprises will be charged both a cost to transport and treat the additional flows along with a commensurate debt service override

Templeton sewer rates

How is the customer’s monthly billing determined?

  • BASE FLOW RATE + PASO DEBT SERVICE = MONTHLY BILL
  • If more than the base flow is added to the system:
  • [BASE FLOW RATE + RATE FOR ADDITIONAL FLOWS] + [BASE RATE FOR PASO DEBT SERVICE + DEBT SERVICE ON ADDITIONAL FLOWS] = MONTHLY BILL
  • This includes the base flow rate and the additional flow rates gradually increasing over a 5 year period to capture both daily operational costs and the “savings” account to manage aging infrastructure maintenance

How Templeton ended up with a dual system

From the mid 1940’s thru the end of that decade, the small, sleepy little town of Templeton was enjoying some economic success. Located on El Camino Real (now Main Street) almost exactly halfway between Los Angeles and San Francisco, Templeton provided weary travelers and truckers a pleasant place to stop, fill up, grab a meal or stay overnight.
Auto and trucking traffic had grown in number and importance over the previous two decades and to serve this growing clientele, downtown Templeton sported as many as seven gas stations, in addition to diners and motor lodges to serve those traveling up and down California’s main north-south corridor.

But when the freeway was built in the early 50’s – bypassing Templeton altogether – the town’s modest economic bubble burst. Other than roadside signs proclaiming Templeton’s presence, it was as if the town had simply disappeared and many downtown businesses boarded up shop.

Only Templeton’s heart kept the community alive.

Templeton Feed & Grain continued to bring in farmers and ranchers from throughout a 100-mile radius and beyond to both purchase and sell grain, feeds, and hay. As a result, businesses that dealt in hardware, lumber, pumps, well drilling, and livestock also survived – and the small town with them.

But Templeton’s neighbor to the north expanded and grew. Paso Robles was known early on for its hot springs; it then drew more visitors as “The Almond Capital of the World” and became even more accessible when the freeway went through.
Paso continued to grow.

In the late 60’s and early 70’s, two things happened that would impact Templeton even further. Paso Robles needed to expand and upgrade its wastewater collection and treatment facilities and the federal government passed the first Clean Water Act.

Unlike Paso, Templeton was too small to be able to afford a wastewater collection and treatment system and remained totally on septic systems. Without the ability to meet the Clean Water Act standards, any growth – economic or otherwise – was essentially at a standstill.

Templeton had long wanted a collection and treatment system, but simply couldn’t afford one. However, without a wastewater system, any economic upturn was all but impossible. And the tantalizing possibility that a new north county hospital might eventually be located in the small town and turn its economic fortunes around was little more than a pipe dream.

Then Paso offered Templeton a deal.

Paso’s desire to upgrade its system for planned, continued growth had run into a roadblock. In order to receive a low interest government construction loan it would have to become a regional wastewater collector and treatment provider – and it needed Templeton to accomplish its goals.
Templeton voters agreed.

The town would get a badly needed wastewater collection and treatment system at a cost it could afford and all the positives that brought to the table – economic and physical growth, a hospital and attendant medical facilities and offices, and the town thought, commercial growth in the 101 corridor between 46W and Main Street. All of these positive outcomes supported the long hoped for Templeton dream of becoming a city and charting its own course.

But Templeton didn’t read the fine print on the contract.

The interceptor pipeline that went to Paso’s treatment plant was built running east of the freeway along the Ramada corridor, Templeton built the internal pipelines that would collect wastewater from Templeton businesses and homes, and the collection line was married to the interceptor line at Cannon Street (now named Las Tablas).

The town was finally able to subdivide and grow internally, and Twin Cities Community Hospital along with a number of medical facilities and doctor’s offices were soon built along with new homes for doctors and medical staff. But Templeton’s desire to become a city was thwarted.

The contract with its neighbor to the north stated that Templeton could only tap into the interceptor line at Cannon Street. Paso Robles owned the interceptor line and used it as leverage to begin gobbling up tax rich properties in the 101 corridor to fuel its growth.

And the border wars began.

Little Templeton did everything in its power to stop its northern neighbor’s southward march, but with little success. Both the courts and the LAFCO (Local Agency Formation Commission) ruled against Templeton at almost every turn. The battle over the 101 corridor lasted more than 20 years and the property losses cost Templeton almost any possibility of ever incorporating.

Finally, in 1997, an agreement was signed that ended the border wars. A line between the two entities was drawn in the Ramada corridor at Volpi Isbel and TCSD purchased that part of the interceptor line that ran from that boundary to Las Tablas.

Templeton still sent its wastewater flows to Paso’s Treatment Plant, was on the hook for 9 percent of the costs to operate, maintain, repair, or replace Paso’s equipment and treatment plant, and continued to pay for treatment based on flows sent to Paso. But for all intents and purposes, Templeton had no place at the table when decisions on rates, maintenance, and replacement were made.

In the meantime, Templeton had grown enough in the late 90’s to begin planning a phased building of its own collection and treatment facility at Meadowbrook along with percolation ponds on the Selby property about a mile south of the High School between he Salinas River and the railroad tracks. The first phases of the project would serve the growth that was occurring on the west side of 101.

Included in those phased plans for the treatment plant was the eventual cutting of ties with Paso Robles and bringing all internal flows back to Templeton’s treatment facility. But that would take time and growth to fund.

Templeton had just completed Phase II when the recession hit in 2008. The great recession shelved all of Templeton’s plans internally, but it didn’t stop the aging of Paso’s treatment plant or the edict from the Regional Water Quality Control Board that the City upgrade the plant.

This last year, Paso began an almost $50M construction project to upgrade its wastewater treatment plant, and TCSD is contractually obligated to begin paying $240K per year over a 20 year period to meet its obligation to repay 9 percent of the cost of the upgrade – until or unless Templeton takes the step to cut ties with Paso and treat all wastewater flows internally.

To do that will cost more than Templeton’s share of the Paso upgrade – but those dollars would be invested in Templeton’s infrastructure and jobs, and perhaps most importantly, would bring millions of gallons of water back to Templeton that are currently being lost to Paso…

And that is the next, very challenging decision the current TCSD Board of Directors must make in the near future – stay with Paso or cut ties with the City and treat all wastewater flows internally.

There are several difficult questions Templeton must answer before making a decision

  • Can and will Templeton residents and businesses support the increased costs relative to both the infrastructure to pump all flows from the east side to Meadowbrook in addition to any necessary upgrades to the treatment plant and percolation ponds?
  • Millions of gallons of wastewater that can be treated and reclaimed are being lost to Paso Robles from Templeton’s east side. With water becoming more and more scarce and costly can Templeton afford not to treat and reclaim all flows internally?
  • Should Templeton continue to invest in Paso’s infrastructure and jobs or invest those dollars in Templeton’s infrastructure and jobs?
  • Is it more beneficial to Templeton to remain a dual wastewater system and continue the contract with Paso Robles?
  • And all of this must be considered with the thought in mind that Templeton will very likely need to build a drinking water treatment plant in the very near future – which means raising water rates as well.

 

TCSD will hold a Public Hearing regarding the proposed wastewater rate increases on Tuesday, October 15th at 7 pm in the TCSD boardroom (located at 5th & Crocker next to the Fire Station) as part of its regularly scheduled meeting for that date.

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About the author: Publisher Scott Brennan

Scott Brennan is the publisher of this newspaper and founder of Access Publishing. Follow him on Twitter, LinkedIn, or follow his blog.