Room full of opposition to increase
The directors of the Idyllwild Water District eventually agreed to raise the water and sewer rates for their customers. The public-comment period, which opponents to the rate increases dominated, the public hearing on the proposed increases, and the agenda items to vote on each increase consumed nearly two-and-a-half hours of the June 20 meeting.
The final vote on both increases was 4-0-1. IWD’s newest board member, Les Gin, who was appointed earlier in the meeting, abstained on both votes. The other directors unanimously agreed to the district’s capital-improvement program, including pipeline maintenance and replacement, and the water treatment facility.
Work has been deferred, and the needs have accumulated and exceeded current district resources.
“Our income does not meet the cost of production. Almost no maintenance has been done in the district for about 20 years,” said Director Peter Szabadi. “We have to make it up.”
Later in the meeting, when the board approved the 2018-19 budget, it also approved General Manager Jack Hoagland’s 10-year capital-improvement program, which will total more than $5 million at current cost estimates.
Opponents of increasing the rates were not disputing IWD’s need to address capital investment issues. They urged the board to take more time to explore options to reduce costs in other ways and then assess what the rate need would be.
For example, former Director Vic Sirkin pointed to the 2017 pipeline project along South Circle Drive. Its cost, boosted because of grant funding, was nearly three times the average cost per linear foot that Pine Cove Water District says it spends on pipeline installation.
Currently, Hoagland estimates he can reduce the IWD cost by a third, which is still about twice the PCWD cost. Sirkin urged the board to fund several small pipeline projects to evaluate whether the IWD staff would be able to bring the installation costs closer to the PCWD level. He also asked whether funding was included to train IWD staff to handle larger pipeline projects.
After evaluating those projects, then the board should calculate if higher rates were still needed and, if so, what is the new rate.
Supporting this approach, Pete Capparelli, who has several properties in IWD, said, “I don’t mind paying my fair share, but I expect the board to do its due diligence spending our money. Why can Pine Cove do pipelines for one-third the price in our commercial district?”
More than 15 customers attended the meeting and a letter from local inn owner Chris Singer Perrault was read to the board. One customer, Deidre Vail, a part-time resident, came from Walnut to attend the meeting and learn about the proposals.
Several of the speakers encouraged the board to pursue consolidation efforts with Fern Valley and Pine Cove water districts or, at least, greater cooperation. The intent would be reducing costs for each of the districts.
“To dance, you need two dancers. We’ll make every effort to reduce expenses, but there is inherent opposition to consolidation,” commented Szabadi.
Trudy Levy was concerned that customers may face more rate increases shortly after this proposal is approved. This rate proposal does not include drought-condition rates and she questioned whether IWD would have to propose those shortly, thus needing a new rate study. As the other speakers said, she recommended delaying this decision so that a more comprehensive choice could be made in the future.
President Dr. Charles “Chip” Schelly responded that “Members of the board are working on the drought rates, and that would not affect what we’ll approve tonight.”
During the public hearing, Gregg Henry of NBS, who conducted the rate study, stressed that his analysis shows nearly 86 percent of IWD’s costs would occur regardless of the water sales. However, the district currently collects only 40 percent of its revenue from fixed rates. Consequently, Henry argued that IWD is vulnerable to rapid changes in water consumption, especially reductions supporting conservation.
The new rate structure increases the district’s revenue from the fixed charges. In 2018-19, fixed charges would provide about 50 percent of its water-sales revenue and this would grow to 60 percent in 2021-22, which would be “a more stable financial footing,” Henry said.
He also stated that the single-family residential revenues do not subsidize commercial production, as one person thought.
Before the board vote, Hoagland reported that 19 written protests/objections to the rate increase had been received. To negate a board vote, 827 negative protests were needed, he added.
“I’m very upset with what the board is saying and how they hurt the community,” said Sue Nash, an IWD customer.
By approving the new rates without addressing the recommendations to seek cost savings, David Lilieholm told the board, “It does not seem like the board and general manager care. It doesn’t appear the board will have any incentive to save money.”
“Previous boards started the process that landed in our laps, costing $300 per foot [for pipeline installation]. Going forward, we intend to do it for less and train our staff to do more,” responded Schelly.
In making the motion to raise the water rates, Director David Hunt said, “I want the community to know a lot of thought and discussion went into this decision. I don’t want to raise rates, but we’re losing money every month.”
In the discussion of the sewer rates, Hoagland said, “The plant works marginally. We can meet our discharge requirement, but we’ve been repairing things. The basic structure of the plant is very old.”
And Schelly added, “Everything is working, but I don’t think it will last forever.”
Both votes were 4-0-1 in favor of the proposed rate increases. Pursuant to the board’s resolutions, the new rates are effective July 1.