by Mark Dolson
Construction Progress and Rate Study Planning
The San Lorenzo Valley Water District (SLVWD) Board has met twice (June 21st and July 13th) since my last report. The June meeting was a lengthy one with a variety of topics, whereas the July meeting was devoted almost exclusively to the recently initiated rate study (which will almost certainly result in a recommendation late this fall for the District to increase its rates).
Most of the June agenda items culminated in unanimous Board approvals. In response to the loss of District Engineer Josh Wolff, the District immediately contracted with third-party Professional Engineers to provide the legally required oversight for two ongoing projects. The District also signed a $119,400 contract with Freyer & Lauretta to replace the Foreman pressure-break structure destroyed in the CZU Fire. In addition, the Board approved a $32,775 contract with Ralph Anderson & Associates for assistance in recruiting a new District Manager to take the place of Rick Rogers, who intends to retire in 2024.
The District completed, and responded to comments on, a required environmental review of its proposal to install a new pumping station and water storage tanks as part of its plan to incorporate two small mutual water companies, Bracken Brae and Forest Springs, into SLVWD. This agenda item elicited a fair amount of public response, as multiple residents expressed concerns about potential noise impacts. District Staff expressed confidence that noise would not be an issue and promised to meet with residents to reassure them.
The only non-unanimous June Board action was approval of the District’s new two-year budget. Director Fultz voted against this, arguing that the District should find a way both to limit its escalating operating expenses and to substantially increase its operating margins (which, in turn, will require increased revenue).
Concerns about the District’s financial stability were also central to the July meeting at which the Board and seven members of the public heard and discussed plans for a legally-required rate study which is just now getting underway. Proposition 218 provides a mechanism via which the District’s ratepayers can reject a proposed new rate structure if over 50% of them formally object. This is a significantly higher bar than merely requiring that there be more “no” votes than “yes” votes in an election, but it is certainly within the realm of possibility. The District’s 2017 rate increase provoked substantial ratepayer outrage, and a doubling of this discontent could lead to a rejection which might seriously impair the District’s operation.
Ironically, the District spends as little as possible on communicating with its ratepayers, so a major concern for Board members was how to ensure that the public will be adequately included in the process of reassessing the District’s rates. The challenge lies in the fact that it’s easy for ratepayers to oppose an increase in rates, but it’s only really appropriate for ratepayers to vote “no” if: (a) they have compelling evidence that the elected Board has failed to responsibly assess or impact the District’s revenue requirements, and (b) they understand and endorse the consequences of forcing the District to operate without the revenue that the new rate structure will be designed to generate. Unfortunately, most ratepayers have many other demands on their time, and they will most likely take notice of this issue only at the last minute.
The next meeting of the Board of Directors will be on July 20th at 6:30 p.m.
