Blacklake residents this week defeated a proposed $928 “equity buy-in” fee to merge their community’s water system with Nipomo’s Town Division system by an overwhelming margin.

Nipomo Community Services District directors unanimously voted to certify the so-called Proposition 218 protest successful and the proposed equity buy-in fee dead.

Directors agreed not to seek verification of the protest signatures from the county registrar of voters after the district received protests from 416 of the 586 eligible customers.

“I don’t think we have a choice,” said Director Jim Harrison in moving to certify the protest. “We verify the protest, terminate the procedure and do not (seek) signature verification.”

But deciding what the next step should be was not so easy, as directors hashed out the options in a long discussion that included suggestions and requests from several Blacklake residents.

Options included hiring a consultant, working with Blacklake residents to come up with a fee or having the staff do it, as Director Cliff Trotter suggested.

“I say we should try it in-house,” Trotter said. “... There has got to be a way to put some numbers together.”

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But district General Manager Bruce Buel said although he holds a degree in economics and is capable of crunching the numbers, he just doesn’t have the time.

“If I did nothing else for two months, I could do this,” he said. “... I would have to stop work on everything else for two months. I don’t think that practical; I don’t think that’s doable.”

Board President Mike Winn said hiring a consultant to come up with a new fee would be the best way, although the most expensive.

But he recommended hiring someone other than the Reed Group, which developed the first $1,672 equity buy-in fee that launched a storm of objections from Blacklake.

“There’s no point in asking the staff to do it,” Winn said. “I think they’re competent (to do it), but their work has been rejected time and time again.”

Harrison agreed up to a point: “If we do it in-house, it will lack confidence (among) the people. I don’t think they trust us.”

He supported creating a committee of district and Blacklake representatives to work out a fee.

Director Ed Eby also supported hiring the Reed Group or an equivalent firm.

“Bruce is not capable, so that’s out,” Eby said. “(Bob) Reed is capable, but he’s been demonized in public so much I do not think he would be acceptable to the people.”

Black Lake Management Association member Ian Wallace said consultants “always tend to be biased toward their clients” and tell them what they want to hear.

“I would much more trust in-house (work) than any consultant in this situation,” he said.

Director Larry Vierheilig argued for the committee: “We need to develop an approach in conjunction with representatives of Blacklake. ... Everybody works hand-in-hand, side-by-side.”

Blacklake resident Bill Petrick told the board the issue is not so much who developed the formula and subsequent buy-in fee, but how it was developed and the fact Blacklake residents were not involved.

“We’re not against any person,” he said. “We’re against not being included in (developing) any assumptions that go into the calculation.”

Blacklake resident Pat Eby (no relation to Ed Eby) offered the services of engineers and certified public accountants who live in Blacklake.

“I think a successful proposal can be put together,” she said.

Eventually, the board unanimously agreed to form a committee composed of NCSD directors Harrison and Vierheilig and representatives appointed by the Black Lake Management Association to come up with a concept for determining a fee.

The goal will be for the committee to return to the board by Aug. 13 with what is essentially a formula that, when the numbers are plugged in, will result in a fee creating a “level playing field” so that neither division will subsidize the other in future water rates.

Directors picked Aug. 13 because Reed is scheduled to be present and may be able to offer feedback on the proposed concept.

But meeting that deadline may be tough, because the Black Lake Management Association must call a special meeting to select its representatives, and that meeting will be subject to the Brown Act, the state’s open meeting law that requires 72 hours advance public notification.

Then committee meetings also will be subject to the Brown Act’s 72-hour advance notice, thus eliminating six days from the three-week interim until the Aug. 13 NCSD meeting.

Once an acceptable concept for determining the fee is worked out, NCSD directors will decide on how to proceed on plugging in the numbers and actually coming up with a fee.

July 24, 2008