Specifically, we need to know why the rate increase is being blamed on the decision to move to full secondary, when the secondary part of it is less than 20%. The decision to get rid of the waiver and go to full secondary only results in a $30 per year or $2.50 per month increase in the sewer rate.

However, the sewer rates for the next five years are scheduled to go from current $87.50 and increase by 20% each year to $217 the fifth year. Thus, the rates go from $87.50 now, next year $105, then $126, then $151, then $181, then $217.

The notice that OCSD sent to the public states: "During the past year the OCSD Board of Directors voted to provide disinfection and secondary treatment to all of the wastewater discharged to the ocean. This has increased annual operating expenses nearly $7 million and has increased the 10 year capital improvement program to $2.1 billion. A sewer rate increase is required to pay for these changes."

During the Pac2 meetings last year, the increase in rates to pay for the full secondary treatment amounted to only a $152 million increase out of the whole capital improvement program (CIP), with a $30 per year increase to the ratepayer.

The sewer rate increase is needed to pay for the whole CIP, not just the increased secondary treatment.

The other elements of the CIP include repairing and replacing sewer lines and other facilities, as well as the secondary facilities needed to keep them at their current 50/50 blend of primary/secondary treatment. OCSD had to build more secondary even to keep the waiver.

The CIP basically amounts to overhauling and rehabilitating the whole system.

I don't disagree with this, it is probably very much needed. However, the public needs to be made aware of the scope of the OCSD's CIP. The public is being misled into thinking the rate increases are just paying for the disinfection and full secondary decision. This is inaccurate, unfair, and unjust.

In fact, the full secondary facilities won't even be started to be built until 2007-2008, and won't be finished until the end of 2012, despite the 20% increase each year to 2008.

In my view, we have two options to recommend to the Board, over and above the necessary suggestion to better explain to the public what the increased rates mean:

1. We can support the 5 year, 20% increase each year. The rationale for this was to decrease borrowing expenses over the long run, thus ultimately saving money, because interest rates are so low right now.

2. Recommend to the Board that they go back to the first recommendation of OCSD staff at the April 23 Board meeting, which was to increase the rates by only 15%, to $100.50 for one year. The actual Agenda item 14.e stated: "Approve a 15% rate increase to the Sanitary Sewer Service User Fee Schedule for FY 03/04, based upon a total Single Family Residence rate of $100.50, and review the user fee structure in one year." If this could be done, the fire might be put out, and future financing may or may not be more expensive, depending on future interest rates, bond financing, grants, etc.

These options could be debated, but let's be sure to show up this Wednesday, to get a head start on the June public hearing. Otherwise, we'll be lost in the crowd come June 25.

Thanks.

Jan Vandersloot (949) 548-6326

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