Lake Hemet Water District proposes higher fees for Garner Valley customers

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Frank Gorman, president of the Lake Hemet Municipal Water District, and Rick Hoffman, director for Division 5, which includes Garner Valley, attended the public hearing Thursday, Aug. 10, to hear comments and questions from Garner Valley customers. Photo by JP Crumrine

Residents of Garner Valley who also are customers of Lake Hemet Municipal Water District are likely facing increased water costs this fall.

Last Thursday, Aug. 10, the LHMWD board and staff held a public hearing in Garner Valley to describe the proposed rate hike and answer customer questions. About 25 people attended the session, which ran for several hours.

LHMWD is proposing to consolidate the five water tiers into one. Currently, water usage rates range from $1.626 per 100 cubic feet (or about $0.0021 per gallon) to $3.711 per 100 cubic feet when more than 250 cubic feet are consumed.

The proposal would unify the five tiers into one and the water cost would be $2.54 per 100 cubic feet for the first year and rise to $2.81 per 100 cubic feet in 2018.

The consolidation of usage tiers is the result of the district’s acknowledgment of only one water source in Garner Valley. Consequently, it feels, under current state law and interpretations, that defending multiple tiers would be difficult. For San Jacinto Valley customers, LHMWD has five water sources, including importation, which is why multiple tiers will still be effective in those areas, according to Michael Gow, assistant general manager.

Also, the bi-monthly meter rate would be increased to levels equal with LHMWD customers in Valle Vista and Hemet. For example, the rate for a three-quarter-inch meter would be $49.54 compared to $12.28 bi-monthly now.

The cost for supplying water to Garner Valley has grown and not kept pace with expenses, according to LHMWD staff. Costs for Garner Valley water are separate from the district’s cost of operations for the San Jacinto Valley areas. Certain overall costs, such as the general manager’s salary and other joint costs, are split proportionally between the two areas based on the actual supply of water costs. As a result, Garner Valley customers pay about 2 percent for these costs.

While due to the last rate increase in 2010 the operational costs for Garner Valley have been positive since 2012, the long-term operational balance has been negative. Consequently, the LHMWD board would like to recover the cumulative $1.7 million in past deficits (going back to 2003). The preponderance of this deficit is the annual depreciation costs of about $145,000 and capital investments over the period.

To pay for these deficits, the district has used money from its valley account. Now these funds must be recovered.

At the meeting, Gow emphasized, “The Garner Valley water system is self-financing. The Hemet /San Jacinto area doesn’t pay for any Garner Valley costs.”

In recent years, operational costs have exceeded revenue, but staff has estimated that the fiscal year 2016-17 revenue (including property taxes) is about $1,000 less than costs. This difference is expected to grow and presents another reason the board is proposing for the rate increase — to ensure a positive operational balance in the future.

At the meeting, several residents who have moved to Garner Valley since 2003 objected to paying for the previous operational losses. For example, one attendee said, “I’ve lived here two years, but you expect me to pay for things from 15 years ago?”

Several other people were also disturbed that the Garner Valley Property Owners Association had not been informed of this long-term deficit and given the opportunity to repay some or all at an earlier period.

When asked, Board President Frank Graham stated, “I think [this increase] is fair. This is the cost to supply water to site here.”

When the meeting opened, Graham emphasized that LHMWD staff could have made the presentation alone. “But we chose to be here. We want to show we’re part of you and hear your concerns. We represent you.”

Another public hearing on the rate change is scheduled for 5:30 p.m. Thursday, Aug. 17, at the district’s boardroom. After that hearing, the LHMWD board is likely to vote on the proposed rate increase, which if approved, would take effect on Oct. 1.

Prior to the hearing, GVPOA wrote LHMWD to request a postponement of this meeting. The board has not granted this request.

In the letter, GVPOA said it needs time for its legal and accounting services to analyze the proposed rates. For example, the letter expressed concerned about LHMWD’s interpretation of how Proposition 218, regarding assessment of fees, is applied in this case.

The argument was that in recovering the cost of the past deficits, LHMWD was not simply recovering the present cost of providing water to Garner Valley customers.

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