Idyllwild Water District (IWD) staff and directors discussed a large water loss and the employee investment policy, as well as approved a proposal for a five-year rate study at last week’s Wednesday, Aug. 17 meeting.
In the July operations report, a 19% loss of water raised the eyebrows of directors. General Manager Leo Havener said he did not know why so much, 275,000 gallons, was lost. He supposed it could be a leak that no one told IWD about, Idyllwild Fire Department training or contractors taking water that isn’t on meters.
President Charles Schelly said, “We need to be very vigilant about leaks and we know that we have a very old system.”
Director Peter Szabadi noted that water demand for the month of July was 70% of capacity, up from 59% in both May and June. If it continues next month, he asked if Havener would move to Stage 3 water conservation level. “Correct,” Havener said.
Right now, IWD is in Stage 2, voluntary conservation. In order to move to a higher stage, the demand must exceed the lower of a stage’s threshold by a certain percentage for a certain period of time. The threshold for Stage 3 is between 61% and 70%.
IWD, based on its own stage criteria, should be in Stage 3 now because it exceeded 13% demand over 61% in just one month — July.
Havener had two wells capped off that he said had not been used in years. “I hired people to do this,” he told the board.
“I think it changes the formula for the stages,” said Szabadi. Szabadi has questioned the stage policy over several months and has asked that staff revisit the policy.
Gene Schneider was present at the meeting. In December, he will be taking the seat of Director Les Gin who moved out of the district.
Szabadi said, in rewriting the employee manual that he hopes will be approved at the next meeting, every employee hired since Jan. 1, 2019 will be considered an at-will employee. Those hired before that are contract employees.
Chief Financial Officer Hosny Shouman talked to the board about employee investments losing money at a rate of 22 to 25%.
IWD puts 10% of an employee’s salary into a retirement investment account for each employee. If the employee opts to put more money from the salary into the same account, IWD will match it up to 5%. (Shouman said later that the employee is responsible for paying taxes on any of the investment.)
The employee only has access to the money when they leave IWD.
Gin pointed out that the employee “is not losing anything but he isn’t gaining anything.”
After discussing investment options — including buying rental property — directors concluded that since this money belongs to the employees when they leave, they should decide where to invest the money. “The risk must stay with them,” said Szabadi.
“If we’re in charge of directing funds and then funds go down … it looks bad for our board,” said Schelly.
Director Steve Olson, who maintains his IWD seat this year because he ran unchallenged, said, “Give Hosny some latitude to go out and talk to some people so employees can give him some direction.”
IWD is opposed to CalPers, a retirement investment program many governmental agencies use. “CalPers is underfunded,” said Szabadi. “For us to go in, we have to pay it back …,” said Havener. “We’d have to prefund and the prefund will kill you.”
Though the board agreed that employees should bear much of the responsibility of investment decisions, disagreement arose when directors considered the proposal to conduct a water and wastewater rate study.
Havener prefers Bartle Wells Associates at $30,850 out of Berkeley out of four proposals and only presented that proposal for consideration to the board.
Director Steve Kunkle asked why not use the past company IWD used, NBS, whose proposal was $42,470? Kunkle argued that even though NBS’s proposal was higher, “I would like them to be local and they are tried and true.”
“Why do you want them?” asked Gin of Havener preferring Bartle. “I worked with them before … excellent job, never had a problem with them … Their numbers are pretty solid,” said Havener. He added that he wouldn’t anticipate their bid to rise more than 5% and that would probably involve travel.
Szabadi asked, “How much are they going to participate in public meetings?” “Up to us,” said Havener. But Olson noted that the proposal states nine meetings.
The proposal passed with three yea votes. Kunkle voted no and Schelly abstained.
The water and wastewater rate study will be for the years 2023 to 2028.
In other business, the board approved minutes from a special meeting held Aug. 3, to discuss the wastewater treatment plant project (WWTP) status.
Nathan Thomas and Nicole Cook of California Rural Water Association attended through Zoom. Schelly asked for a realistic date to break ground on the project. It is estimated to be August 2024.
Directors asked other questions to get a better sense of the status of the project since IWD already has spent 55% of the contractor for the first two task orders.
IWD was told it could expect to be able to request grant funding in February 2023. Cook said the association will submit a funding memo to IWD by the end of the month. She also told the board that second homes could lower the amount of grant funding available.
IWD is replacing its WWTP because it is more than 30 years old and also needs expansion. Idyllwild Arts Foundation is considering selling some of its land to IWD to expand the facility.
IWD is the only water district on the Hill with a sewer system. However, not all IWD customers are on the system. Many still require septic systems.