The Idyllwild Water District (IWD) held a pair of “Town Hall” meetings at its boardroom to discuss proposed water and sewer rates on May 30 and 31. The board has voted to approve a five-year plan for rate hikes that could lead to a cumulative 85% increase on sewer bills and a cumulative 27% hike for water, which could really add up to 74%.
Prop 218 notices have been mailed and a public hearing is scheduled for 6 p.m. Wednesday June 21, in the IWD boardroom. Unless a majority of customers for each service submit written protests by the end of that meeting, the new rates will begin to go into effect. This means about 300 letters of protest would be required to scuttle the sewer hikes, and over 1,100 for water.
The meetings were sparsely attended. At the table were General Manager (GM) Leo Havener and Bartle Wells Associates President Doug Dove. Bartle Wells are independent public financial advisers with headquarters in Berkeley. The first night, only one member of the IWD director attended, President Dr. Charles Schelly. Also present that night were Chief Financial Officer Hosny Shouman and five members of the public including this reporter, who is also an IWD water customer. The second night, only four ratepayers were present, including the reporter and one customer returning from the first session. The second night had been planned as a repeat performance, but instead went straight to questions.
The sewer rate hikes are intended largely to pay for a replacement of IWD’s wastewater treatment plant, which has been in service for decades. The higher rates will, according to Havener, put the district in a more favorable position as it applies for state grants to finance the project, which is expected to cost over $7 million. There also are overdue projects on the water side, including replacing supply lines and re-coating storage tanks.
Dove, who claimed 33 years experience consulting on water rates, presented a slide show reiterating the contents of the rate study that has been sent to customers and is available on IWD’s website. The study represents four months of work by Bartle Wells.
Havener expressed guarded confidence in the ability to get grants once the rates have been increased. Idyllwild qualifies as a “disadvantaged community,” he said, “and that helps.’ He thinks 50% grant funding is “realistic,” and that the grant process should take less than a year. He characterized the rate hikes as proof to grant agencies that a community has “skin in the game.” Dove also mentioned state “low-cost loan funding.” Part will be funded with cash, “about $1.5 million.”
The presentation included a graph representing four sewer rate hike options, between 8% and 15%. The two lower rate increases, 8% and 10%, represent the needed income to pay for the sewer plant if grants are acquired for $4 or $2 million. The worse-case scenario shows the present sewer rate per meter growing, over five years, from $44.20 to $88.90, and the best-case scenario shows a 2028 rate of $64.94.
According to Dove, “If the district gets grant funding, it may be able to lower these increases. We’re going out and getting approval for this maximum, worst case, so that we have the funding and can show the state and the feds that we’ve got the funding approved, the financial house is in order so we can qualify for the grants.” But there can be no promise that the full increases will not be realized.
Water charges are more complex. Having fixed charges for the several different supply line sizes, and a unit charge for usage, with different rates for residential and commercial customers. The IWD/Bartle Wells table show a customer who currently pays a $40.59 meter charge paying $58.41 in 2027-28. An example showed an “average” user using 400 cubic feet (CF) and currently paying $49.95 could see their bill increase over five years to $87.26, over 74% higher, if the maximum increases are deemed necessary by future boards of directors.
The plan reduces water usage rates from three tiers to two. One rate payer present at the Wednesday meeting noted that the lower tier users will see a larger jump in their bills than those in tier 2, heavier users, “Not really encouraging conservation.” Dove responded that the rates have been designed “to be legally defensible.” During the initial presentation, Dove said that “with Prop. 218, the interpretation in the courts has gotten more stringent,” and that the two-tier structure was “more closely tied to the cost of service.” He and Havener agreed that legal battles over tiered pricing can be expensive for a district.
The present tiers are 0-450, 450-900, and over 900 CF. The new tier 1 will be up to 400 cubic feet, and tier 2 any amount over that. The proposed tier 1 rate is $5.30 per hundred CF, more than double the present $2.34.
Dove described the wastewater plant as “in poor condition, at the end of its useful life.” Havener and Dove also said there are many fines and other actions the state can impose on a sewer plant that starts spilling.
The study looks 10 years into the future at capital funding needs, continuing to put aside money for other capital projects, about $750,000 per year. This includes work on water lines, tanks and pumps; over five years this totals around $4.1 million. This is to be covered by an 8% annual water rate hike. No borrowing will be required for the water side. It is, in Dove’s words, “pay as you go.” Havener, in response to a question from the Crier, said that reserves are to be kept at 18 months operating expenses, and that during the pandemic, when collections on overdue accounts were halted, the reserves were crucial.
The projected plant would be adjacent to the old one on land adjoining Idyllwild Arts (IA), and of the same capacity, 250,000 gallons per day. Higher capacity would require all new permitting. The old one will be kept and refurbished as a backup. Redundancy is “commonplace,” and “preferred” in the wastewater business, he said. It will sit on 1 acre of land to be purchased from IA. Once that is completed, within weeks, then the deed must be registered with the county, which may take nine months. The present plant is operating on average at about half capacity, but during wet winters, like this last one, it reaches near capacity due to “influx and infiltration.”
Several years ago the board came close to replacing the plant, but put it off, eventually having to give back funds the state had provided for planning. As Shouman put it, “Five years ago the price was $4 million. We kept wishing, didn’t act, now it’s $7 million.” One ratepayer noted that these projects seem to always come in over budget.
Other issues noted by citizens included IWD’s lack of continuity in management: Since 2000, Fern Valley and Pine Cove water districts have each had two GMs, while Idyllwild is on its seventh. The sewer system is a financial liability that has been one sticking point in talks about district unification, although Havener argues that the other districts benefit from the proximity of a commercial district with sewer service.
Several ratepayers had questions about illegal subdivision of single family homes into “apartments,” often without obtaining proper permits or paying sewer fees for additional units. Havener said IWD does look into these, but that even when the county acts it takes nine months to process them, and the number of units is not likely to solve funding issues. There also is California’s “granny flat” exemption: another unit is only assessed if a it is rented out, not if it is occupied by a family member.
One 30-year resident told Havener he would have a hard time selling these increases to the ratepayers. But it is the skeptics who must “sell” their neighbors on protesting the plan, and before June 21.
