District justifies water rate increase
by Peter Burke
Sep 26, 2013 | 2499 views | 11 11 comments | 47 47 recommendations | email to a friend | print
San Lorenzo Valley Water District administrators explained this week that a rate increase is necessary to repair an aging water system in need of expensive repairs and to ensure the financial stability of the public agency into the future. The district also said that combining its three facilities into one campus will increase efficiency and allow for an ADA and seismically up-to-code administrative building.

The proposed increase — 16 percent in 2014, 13 percent the following year and 8 percent, 9 percent and 9 percent each year through 2018 — has been approved by the district’s board of directors and awaits final approval at a Proposition 218 rate increase hearing. The hearing is scheduled for 7 p.m. Oct. 24 at Highlands Park Senior Center, 8500 Highway 9 in Ben Lomond. Property owners have the ability to protest the increase in writing, and Proposition 218 calls for half the district property to protest in order to turn down a hike.

The district says maintaining and upgrading the water system is a key component of the increase.

“We’re performing reactive maintenance,” said Operations Manager Rick Rodgers. “Our staff is spending more and more time on mainline repairs.”

Rodgers said in many cases, his staff is adding patches to substandard water mains that are 50 or 60 years old.

“There are some streets where we are on a first-name basis with some of the customers because we are out there almost every month,” he said.

Rodgers did say the backbone of the system is in “fairly good shape,” but that many of the pipes that go into neighborhoods are 1 1/2 –inch or 2-inch mains that should be replaced with 6-inch mains to allow adequate water flow and for fire protection.

Rodgers said that these types of repairs are expensive, with main pipe running $150 to $200 per square foot, not to mention the cost of environmental studies and the cost of digging up and replacing pavement.

If the increase goes through, the district’s revenue would increase from $5.6 million per year in 2013 to $8.59 million per year in 2018, the last year of the increase. As part of the increase, the district has budgeted $1.29 million per year, starting in 2014, towards $27.4 million in capital improvement projects it identified in 2010. A complete list of the projects is available on www.slvwd.com.

The average customer’s bill would increase from $90.99 bi-monthly to $153.02 in 2018, according to the district.

One of those projects on the capital improvement plan is the district administrative campus, which the district calls its facilities consolidation. The district will consolidate two storage facilities and its administration building to one location in downtown Boulder Creek. The land has been purchased for $2.2 million and the district plans to build the new facility for about $6 million more.

District analyst Besty Herbert said the current administation building on Highway 9 in downtown Boulder Creek was purchased in 1964, and is not Americans with Disabilities Act compliant. It also has limited parking, is not up to seismic code for a new building and is simply old.

A tour of the building found the floor to be slightly sloped down the hill, single stall bathrooms for male and females district employees and a warehouse with deteriorating wooden flooring and shelves.

“We had extensive mold and rot and we did a remodel,” Herbert said. “It included new carpets and paint, just to make it habitable.”

Herbert said the district has looked at other options revitalizing the building, but found that because there is not enough on-site parking, the building’s footprint would have to shrink to add parking spaces, creating an added burden in already tight quarters.

Secondly, the new campus would act as a 24-hour emergency facility for the district — including its own fueling station and a place to house its computer system that monitors water flow during emergencies. Rodgers said the district is in talks with local fire districts to share the fueling station with them.

The campus would also include a public meeting room for the board that could be used by the community.

Opposition to the campus project has popped up.

A Zayante-based group called SLV Watchdogs said a rate increase is merited, but not if the purpose is to build a new administrative campus. For information, visit www.slvwd.co or search San Lorenzo Valley Watchdogs on Facebook.

The increase is based on a rate study performed by Municipal Financial Services of Henderson, Nev. which took into consideration ways to fund the districts board-approved 2010 Capital Improvement Plan.

Comments
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The Watchdogs
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October 08, 2013
SLV Watchdogs Discover an Additional $3.3M Not Disclosed in the Campus Price Tag

That’s right folks, the cost of their Taj Mahal Campus & All-Night Gas Station (next to the San Lorenzo River) has ballooned to $12.8M.

SLV Water has stated that it’s a $6M project. Then the Watchdogs unburied $3.5M in Campus pre-construction expenditures that they kept hidden in the depths of their website. Now we have found an additional $3.3M in loan costs and interest that must have slipped their minds during their press interviews and board meetings.

The Watchdogs have published an in-depth white paper on the financial and regulatory facts regarding the Campus Project. If you thought it was outrageous and unnecessary before this point, this is going to send you through the roof.

http://www.slvwd.co/dp/content/white-paper-administrative-campus
The Watchdogs
|
October 08, 2013
SLV Watchdogs Discover an Additional $3.3M Not Disclosed in the Campus Price Tag

That’s right folks, the cost of their Taj Mahal Campus & All-Night Gas Station (next to the San Lorenzo River) has ballooned to $12.8M.

SLV Water has stated that it’s a $6M project. Then the Watchdogs unburied $3.5M in Campus pre-construction expenditures that they kept hidden in the depths of their website. Now we have found an additional $3.3M in loan costs and interest that must have slipped their minds during their press interviews and board meetings.

The Watchdogs have published an in-depth white paper on the financial and regulatory facts regarding the Campus Project. If you thought it was outrageous and unnecessary before this point, this is going to send you through the roof.

http://www.slvwd.co/dp/content/white-paper-administrative-campus
Theryl McCoy
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September 28, 2013
Ouch! The campus property that SLVWD plans to build on was purchase in 2005, right at the very peak of the housing market. I'm just a guy on a computer and even I knew not to buy property at that time. Bad, and expensive decision.
Bruce Holloway
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September 28, 2013
Peter, going back to an article in May, you've been unclear about when these increases are slated to go into effect. The mailer doesn't say 2014, it says FY14, which is now. The initial increase will go into effect immediately after the hearing or on November 1. And the mailer doesn't say 2018, it says FY18, which means July 1, 2017. That's only three years, nine months from now. They want to do five increases in that time.

The $1.29 million per year budgeted for capital expenses isn't part of the rate increase as you wrote, it's towards the bottom of page ii of their budget for 2012-13 which ended already:

http://www.slvwd.com/finance/2012.2013 Annual Budget.pdf

Apparently they're not planning to spend any more for infrastructure than they've been doing already.

You really should print some corrections or clarifications.

Larry Fogelquist
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September 27, 2013
Speaking of Monterey Bay Sanctuary Watershed... a topic near and dear to all of our hearts, I would like to direct your attention to a well written blog post submitted recently by a member of the SLV Water District Watchdogs that addresses this very topic. You can see it at: http://www.slvwd.co/dp/blog/lets-preserve-ecological-balance-our-sensitive-watershed-inheritance.

Larry
Vern Tywin
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September 28, 2013
Oh my. Cracks me up that the Valley Womens Club with their support of high density housing, 20,000sf rec centers, water district palaces have strayed so far from their claimed environmental mission.

When they create a vaccuum with their constant ignorance of environmental issues, then some other smarter groups are going to step up and fill that vaccuum.

Way to go Watchdogs! You guys rock!
Felton Frank
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September 27, 2013
A factual and educated response to Nancy Mary's, Press Banner commentary in support of the rate increase.

By Stephen Petersen

Your polemic convinces only those who are already convinced. A genuine argument is supported by actual fact, not forcefully stated opinions.

You say that "contrary to opponents' statements, the district is not spend-thrift." Your argument rests on a claim of competence that allegedly results in appropriate spending. Examples please? The opponents you cite asked the same question, but reserved judgment only until after they had thoroughly conducted their own investigation into spending patterns contained in the districts publically available disbursement records for the period from 2005 to 2013. For example, there were no public statements about how woefully inadequate the present administrative buildings were until very recently, but during the period between 2009-2010 over $450,000 were being paid to renovate them. This is odd; apparently the code and safety violations weren't considered high enough priority to address at the time. Or maybe they weren't even known. And simultaneously, money was being poured into the expensive design of the administrative campus, which from the same analysis is upwards of $3.6 million dollars. Spend-thrift?

The arguments supporting the administrative campus must be weighed prudently against the costs and there is no such cost analysis available anywhere. I only hear shallow emotional opinions offered as specious reasoning in opinion pieces like yours. There is no objective convincing content. The 2010 Capital Improvement Program (CIP), placed the campus project in the highest and most urgent "A" category as project A6 without any documented quantitatively compelling reason. The CIP itself was supposed to be subject to review every two years, but this never took place. Why? It was only after a community member requested a list of "completed projects from the CIP" several board meetings ago that something moved. This event sparked an interesting ad hoc dialog between the Board President and the General Manager. At that meeting, the two fumbled with the fourteen category projects trying to agree on which had been done and which hadn't; there was no consensus. At the next board meeting, expecting a list, the board instead passed a resolution to conduct what amounts to the tardy two year review. How encouraging. The ship of state is being led by wise, informed and competent leadership, and who are we to question them?

The 2010 Strategic Plan includes five of the CIP's category A projects, but without any discussion explaining why they were specifically chosen and others were excluded, especially why we must accept the campus to be more urgent, with its absurd price tag, over other category A infrastructure improvements that could be done instead. Uh, you know, the 100 year old leaking pipes, tanks and such?

The "carefully researched 2010 Strategic Plan" is a three year old document that sat on the General Manager's desk for over a year before it was hastily put on the agenda at the first board meeting in September. There, Director Brown requested that adoption be delayed to give him time to study it, since four days from the time of its posting was insufficient to enable a responsible vote. The reaction by the majority was hostile and disrespectful. He was overridden and it was rubber-stamped without further discussion.

You are asking us to accept the decisions made by a hostile oligarchy that claims transparency but belies this in their actions; that claims to want "completely open and honest input" from the community but rejects it at every turn. How do I know this? Because we attend board meetings and subcommittee meetings and we take notes, and we have been doing so for well over a year. And I'm not the only one.

Stephen Petersen,

Member, San Lorenzo Valley Watchdogs

BL Charlie
|
September 27, 2013
I have no issue with funding infrastructure upgrades. I do have an issue with spending $6M on a new building. $6M ?? really ?? BL Fire asked for $5M and was voted down. With some relatively inexpensive modifications to the fire station - they are getting by with the existing facility. Take a lesson SLVWD !
Felton Frank
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September 27, 2013
BL Charlie, you are right on the spot here. But don't forget about the $3M they have already spend on property, drawings and permitting. That makes it a $9M campus. A $9M complex they want to build on top of a Monterey Bay Sanctuary watershed.
Bruce Holloway
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September 28, 2013
Table 3-2 of the rate study indicates that the $6M will be borrowed and repaid over twenty years. It shows an additional $360,000 for Issuance Cost and Reserve. That makes it a $9.36M campus, not counting interest on the loan.
Theryl McCoy
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September 28, 2013
Perhaps SLVWD and the fire station should share a facility? That seems like it would be a good match.


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