Fern Valley Water District moving forward to approve rate increase

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Public hearing likely in December

In an unanimous vote, directors of the Fern Valley Water District authorized staff to proceed with mailing information and scheduling a public hearing later this year on the proposed water rate increase.

At the Oct. 20 board meeting they voted to proceed with preparation of the Proposition 218 material. The details and rationale for the increase were discussed at the Oct. 13 workshop. According to General Manager Victor Jimenez, a public hearing on the rate proposal is likely to be in December, if all the material can be mailed in November.

The new rates (which are billed bimonthly) will consist of a meter charge and a usage charge. The meter charges will depend upon the size of the meter and can range from $30 to $2,400. There are no 8-inch meters in the district, for which the highest rate would be charged.

Water usage would cost $4 per 100 cubic feet (or 748 gallons) for the first 1,000 cubic feet (7,500 gallons) in the two-month billing period. Usage greater than 1,000 cubic feet would cost $11.30 per 100 cubic feet. The existing tier three is eliminated.

For a customer with a 5/8-inch meter but no water usage, the water bill would increase from $32.70 bi-monthly to $60, nearly 85 percent increase.

For the average customer who uses 5,600 gallons every two months, the water cost would increase $24.67 (38 percent), from $65.33 bi-monthly to $90, according to the district’s analysis.

At the Rate And Revenue Committee workshop, Jimenez estimated the new rates would generate about $800,000 annually, about $200,000 more than the current water charges yield.

The proposed new rates would be for five years with a potential maximum increase of 5 percent annually, according to Jimenez. If an increase were needed, the Board would have the discretion to raise rates between 1 and 5 percent.

The financial report for the first quarter of fiscal year 2017-18 indicated a net deficit, attributable to the lack of property tax revenue. Receipt of these funds begins in December. Water sales revenue however was $215,000, more than 40 percent of the full year estimate.

This growth brought some surprise from the Board. “People are using more water,” Jimenez said “Maybe because of the rain and snow last year or the dry summer.”

He also noted that FVWD had installed two new meters during the quarter and upgraded several existing meters.

In other financial business, the board accepted the 2016-17 audit prepared for it by Teaman, Ramirez and Smith of Riverside. According to the auditing firm, “the financial statements present fairly, in all material respects the respective financial position of the business-type activities of the FVWD as of June 30, 2017…”

In 2017, FVWD’s net position increased about $200,000, from $7.5 million to $7.7 million. While revenues increased about $70,000, the district’s expenses fell about $25,000. The district’s long-term debt declined about $63,000 after retirement of an employee.

The auditor again recommended greater separation of financial duties, but the district’s small size, one office employee, does not permit implementing this recommendation, Jimenez told the board. But he will prepare a response to the auditor explaining the district’s actions to all of the recommendations.

In water business, Jimenez told the board that production has been up this year. In September, production was about 25 percent more than in 2016, and that trend continued in the first third of October.

Stream flow has decreased this fall and wells are producing a larger share of FVWD’s water. Also the groundwater level of the wells fell slightly during September, Jimenez reported.

In other business, the board recommended that Jimenez proceed with the office expansion and formally rejected the request to provide back up staff to Stonewood Canyon Estates.

The private development had inquired and requested whether Fern Valley could provide operational support to the neighborhood, which is north of Pine Cove, in an emergency if Stonewood’s engineer could not be available.

Unanimously the board agreed that was beyond the district’s scope and ultimately made the district dependent upon Stonewood’s engineer.

The board also formally accepted the resignation of Jim Wise as a director. Wise does not want to serve as a director in any capacity.

He had submitted paperwork to be a candidate in the June primary. But only three people, including incumbents — James Rees and Robert Krieger — filed for the three available seats. Consequently, he was elected. But in a Sept. 18 letter to the board, he respectfully declined the opportunity. So FVWD current has one vacant directorship.

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