San Lorenzo Valley Water District will seek a significant rate increase that will be spread over five years to fund several major projects and cover regular increases in operating costs.
The district hired Municipal Financial Services of Henderson, Nev., to complete a study to determine how high rates should be set when factoring in several upcoming projects.
The study, submitted to the district board in March, found the district’s rates would need to increase by 53 percent over the next five years to connect SLV’s water system with others to ensure supplies during an emergency and to build a new, centralized campus for the district’s administration and workforce.
The increase would be staggered, with hikes of 13 percent in 2014 and 2015, and 9 percent in 2016, 2017 and 2018.
If the rate increase passes, the district’s gross revenue would increase from $6.4 million in fiscal year 2012-2013 that ends in June to $8.6 million per year by 2017-2018.
The district’s board of directors requested on April 18 that district staff move forward with the rate increase process.
The district plans a Proposition 218 rate hearing June 27 — according to Prop. 218, a taxpayer protection initiative passed by California voters in 1996, the rate increase will take effect unless more than half of the district’s 7,100 customers submit a written request by that date opposing the increase.
The district’s board plans to hold public outreach meetings to explain the increase.
Also, Prop. 218 requires the district to mail an explanation of the rate increase and how residents may protest it. The letters should arrive in the mail by early next week.
One board member, Randall Brown, has spoken out against the amount of the increase as it relates to the campus project.
He said the intertie project is necessary, but hopes the board will slow down on the campus project because of the large amount of money required from ratepayers.
The other board members have voted in favor of the increase.
Proposition 50 intertie project
The district hopes to spend $5.4 million in reserve funds to match $6 million from the California Department of Health to build an emergency intertie system in the valley.
The system would connect several local water districts to ensure water could be moved up and down the valley in the event of emergencies.
Interties would connect Scotts Valley’s system to SLV, Mount Hermon’s system to SLV, Lompico’s system to SLV, the Felton system to the rest of the SLV system and connect the SLV North and South systems at East Zayante and Graham Hill Roads.
District Campus project
Continuing a decades-long project, the district plans to consolidate its operations to a central location along Highway 9 in Boulder Creek.
Currently, the aging administrative office and operations building are on separate sides of the highway.
The district plans to borrow $6 million to be paid back over 20 years at a 2 percent interest rate, with the rate increase helping offset the cost. The district is currently developing specific plans to submit to the county requesting building permits.
AT A GLANCE
For a complete look at the rate study and proposed increase, visit www.slvwd.com and select the agenda for the board’s March 21, 2013 meeting.
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