Santa Maria utility rate hikes.
A chart shows Santa Maria's combined water and wastewater rates, in light blue, which would remain among the lowest in the first year and in the middle by 2027. (City of Santa Maria chart)

Santa Maria utility customers will see their bills rise for the next four years after the City Council approved annual hikes that include planning for a major modernization of the wastewater treatment plant.

On Tuesday night, the council voted 4-0 to approve the increases for water and wastewater services, with Mayor Alice Patino absent.

“It’s just a necessary evil that we have,” Councilman Mike Cordero said of fee increases. “Sometimes, we just must raise certain costs because of all the costs that are getting raised to us as a city entity.”

The rate hikes came after a cost of service study that served as a tool to show a need for additional revenue to match the cost of supplying water and wastewater services to customers.

Santa Maria followed the Proposition 218 process that spells out requirements for hiking fees. 

“They have to be reasonable, they have to be proportional to the property receiving the service and they have to cost-based,” Utilities Director Shad Springer said. 

The process also details the protest process with Santa Maria having 19,913 utility customers. That means 9,958 customers would have needed to protest the rate hikes. 

The city had received a handful of valid written protests by the close of Tuesday’s public hearing, staff said. 

Santa Maria’s rate as of January 2024 would be among the lowest and would remain among the lowest even with the rate hike in 2027.

Santa Maria utility rate hikes.
Santa Maria’s wastewater revenue requirements will climb in the coming years amid a need to modernize the facility, Utilities Director Shad Springer said in explaining rate hikes. (City of Santa Maria chart)

“As of today, Nipomo Community Service District customers that use 10 units of water and have their sewage treated pay more today than we’re proposing the city of Santa Maria customers will go to four years from now,” Springer said.

For comparison, the combined water and wastewater rate for a residential customers would rise to $136 a month Jan. 1, 2024, and $165 a month by Jan. 1, 2027.

However, rates remain based on a number of factors, including usage, which can vary. 

Two people spoke about the rate hike plan, with one man noting that costs are rising faster than incomes for retirees. 

“When you have low-income people, or lower income, every increase, every cent makes a difference,” Jim Welch said.

Another resident urged the city to make the utility billing more customer-friendly by spelling out how many gallons of water a household uses instead of employing a vague and confusing term of units.

Some of the biggest boosts in bills will occur with wastewater as costs will jump approximately $20 over the next four years. 

That’s because the city’s wastewater treatment plant needs to be upgraded in the coming decade, Springer said.

Santa Maria has started searching for a consultant to assist with creating a wastewater master plan to lead toward building a sewage treatment plant that will serve the community for the next 30 to 50 years, Springer added.

While the project isn’t designed, a preliminary estimate for a plant to meet the needs of a city the size of Santa Maria puts the price at $200 million, Springer said. 

Portions of the existing plant were built in the 1930s and remain in use today, but regulators have warned that the city needs modern treatment technology to comply with regulations for waste discharge.

Santa Maria’s council last approved multiyear rate hikes in 2019, and the final increase under that action went into effect in January.