Water Industry News

Tiny town faces giant rate hike -- 470%


June 10, 2006

LIVE OAK SPRINGS – The operator of the water system in this backcountry community has proposed a rate increase that would more than quadruple what his 138 customers now pay for their water.

Nazar Najor said in a notice to customers that the 470 percent increase is needed to make repairs required by the county, and that the system – plagued for years with unsafe water and leaky pipes – will not be able to operate if the increase is not granted by the state.

Chuck Dierkop, a Live Oak Springs resident who is leading opposition to the proposal, said he'd understand some increase in fees, but the proposed rate hike is too much.

“I feel that the rate increase is excessive with no guarantee of any improvements,” he said.

The state Public Utilities Commission, which regulates the system and must approve the rate hike, has scheduled a hearing on the increase for June 27. The hearing will be at 6 p.m. at the Live Oak Springs restaurant, 37820 Old Highway 80.

Live Oak Springs is about 60 miles east of San Diego, off Interstate 8 near the Golden Acorn Casino. Najor's family owns the water system, a restaurant, six A-frame cottages known as the Live Oak Springs Resort, and a trailer park.

Water rates have not increased since 1983, when Najor's father bought the system. Under the proposed increase, customers who now pay meter fees ranging from $6.50 per month to $17.55 per month would pay fees from $50.28 to $135.77 per month. Costs for usage would increase from

50 cents to $1.50 per 100 cubic feet of water for the first 300 cubic feet. Usage above that would remain at $1.80 per 100 cubic feet.

The rate increase would bring in an additional $68,140 per year for the water system, according to the hearing notice.

Najor refused to discuss the rate increase with a reporter, but he said his system provides quality well water that is

“10 times better than the water people get in town.”

Although a notice sent to customers said documents relating to the request for a rate increase are available for review at Najor's restaurant, he refused to allow a reporter to look at the files.

The Live Oak Springs water system, which is more than

50 years old, has a long history of outages and test results showing the presence of total coliform bacteria in the water. Coliform bacteria itself is not harmful, but it indicates contamination of a water system.

Live Oak Springs residents were required to boil their water or drink bottled water for more than a month last fall when tests showed the presence of coliform bacteria. The county fined Najor $5,600 for failing to maintain the system, which he appealed.

The Live Oak Springs system is one of 162 small water systems that operate in rural sections of San Diego County. They provide water to customers who live beyond the boundaries of a city or a water district, but don't have private wells to supply their water. Live Oak Springs is one of the few systems run by a single owner instead of a large company or volunteer board.

Dierkop, who has owned property in Live Oak Springs for 30 years, has written a letter to the utilities commission opposing the rate hike and has talked with dozens of neighbors about the proposal.

He said he now pays from $100 to $120 every two months for water.

“Yes, the rates are low. Yes, they should be raised,” Dierkop said. “But this proposed rate would double or triple my water bill.”

Dana Eacobellis, who recently moved to Live Oak Springs, said she was shocked to see the amount of the proposed increase.

“That's a lot of money,” she said.

“That's ridiculous if they're not willing to fix the system.” 

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