Idyllwild Water District directors approved a preliminary 2014-15 budget, which includes a 6-percent water and sewer rate increase, originally approved in June 2010, and applied to the budget annually for five years since. The board also set a public hearing for Aug. 20 to discuss other changes to water fees. A board workshop to discuss additional sewer revenues is planned for July 9.
The fiscal year 2014-15 water budget, which begins July 1, totals $1.2 million excluding depreciation expenses. Without any property tax revenue, costs to operate the water program exceed water sales revenue by nearly $240,000. With the property tax funds, the water program would end the year with a net income of about $44,000.
A year ago, Chief Finance Officer Hosny Shouman projected the 2013-14 net income to be about $4,000. Through April it is substantially better — $185,000. A substantial savings was the $60,000 budgeted for consulting fees after former General Manager Terry Lyons retired.
The proposed changes to the water fees include both a doubling of the $30 standby fee and reducing the amount of water a customer may use at the base rate. Currently, for any usage less than 500 cubic feet (3,740 gallons) in a month, no usage charge other than the base rate is applied. Beginning July 1, the average residential base rate will be $28.70 per month, up from $27.07, for the last of the five-year increases.
But this proposal reduces the usage level from 500 to 250 cubic feet (or 1,870 gallons), for the application of the usage fee. Beginning July 1, customers will pay slightly more than a nickel per cubic foot for usage of more than 250 cubic feet or 1,870 gallons. Lynch estimates the additional water revenue would be about $16,000.
Neither the water nor sewer program budgets include funds for any capital projects, General Manager Tom Lynch told the board. The board will discuss raising water revenue for future capital budgets at the August meeting and public hearing.
The cost for the 2014-15 sewer program is projected to be about $570,000, without depreciation expenses. Direct revenue is only $350,000 and property tax revenue is $111,000. Consequently, Shouman projects a net deficit of nearly $110,000 for sewer operations.
The sewer program needs additional revenue to break even on its operating expenses without considering a capital program. The board will discuss the sewer program costs, revenues and capital needs at the July 9 workshop.
“It’s just a nightmare and only going to get worse,” commented Director Mike Freitas, who urged taking efforts to improve the sewer program.
Some of the capital projects that will be funded if the district increases its revenue stream include pipeline replacement for both the water and sewer program and upgrades of water treatment equipment and the solar field near Foster Lake, security fencing and a new vehicle.
While Lynch is confident of the need to begin sewer pipeline replacement, the actual project details will be identified after the pipeline is inspected in the next few months. Director Warren Monroe noted that these details would aid the discussion of how and how much to increase future sewer revenues.
We’ll need about $17 per month [per customer] just to break even,” he estimated. “We need to be fiscally responsible first.”
In water business, Lynch reported that the well levels have fallen slightly since May, “but surprising with the lack of rain, [they] seem to be holding.”
The district entered Stage 2 Water Emergency in September 2013 and it appears to be affecting customers. The May production was 8.2 million gallons, which was 1.5 million (15 percent) less than a year ago. Each month, this year’s production has been less than the corresponding month in 2013.
In the first five months of 2014, IWD produced a total of 31.4 million gallons of water compared to 36.9 million in the same period during 2013. But the 2013 period was 8 million gallons more than the first five months of 2011 and 2012.
When asked about the possibility of a Stage 3 water emergency condition, Lynch replied, “I’m not in a hurry, but we will monitor the wells. We’re still in Stage 2, it’s very dry.”
He added, “… given our persistent dry conditions, we may be moving closer to Stage 3. Foster Lake is dry.” He is collecting the data from the last Stage 3 declaration and the condition of the district’s wells before and during that period.
