Fern Valley to consider bigger capital budget

Financial questions, plans and a notable local official were the major
topics of discussion during the March 21 meeting of the Fern Valley
Water District (FVWD) Board of Directors.

Idyllwild Fire Chief Mark LaMont visited the FVWD meeting to leave a
copy of the latest International Organization for Standardization (ISO)
report for the fire district. He was both proud and disappointed with
the latest rating for the Idyllwild Fire Protection District (IFPD).

“Five years ago, it was 80.36,” LaMont said. “The latest is 89.33, an
incredible jump.”

However, a fire department needs a rating of 90 to qualify as “exemplary
fire protection,” the highest ranking. He thanked the Board for Fern
Valley’s contribution to the recently improved rating.

“There is a large number of points for water systems,” he told the
board.

Nevertheless, he is collecting more water data from both FVWD and
Idyllwild Water District (IWD). With this information, he will then
request an interim audit with the goal of nudging the score above 90.
This accomplishment should assure fire insurance companies and
underwriters that Idyllwild is a safe location to provide fire
insurance.

“The state of insurance coverage is rough. No one wants to underwrite in
the high threat of the west coast,” he opined in an email to the Town
Crier.

LaMont shared that the chances of improving the ISO rating were somewhat
better with more water district data. To improve the rating based solely
on IFPD’s activities would most likely require more staffing, which is
not feasible with the current budget resources, “… so we’re turning to
water districts for help.”

This would include the water districts increasing the number of fire
hydrants tested on an annual basis, he suggested in response to a
question.

“Reliability and maintenance are options to get us more points,” he said
and added, “There’s not a lot of room for your district to do more.”

But he shared that he is working with IWD “… to help us get additional
points as we work toward a Class1 rating. The earliest we can ask for
that is 18 months,” he wrote in an email.

While the current and future years’ budgets were not on the agenda,
there were several financial questions and preliminary discussion on the
schedule for preparing the fiscal year 2024-25 budget, which is
effective July 1.

One director asked about the recent expenditure of $21,000 for added
testing. FVWD General Manager Victor Jimenez replied that the payment to
Babcock Laboratories in Feb. was greater than normal because of the need
to do more testing for synthetic organic compounds (SOCs).

“We had to test all sources for SOCs due to the fact that the system had
never been sampled for SOCs before,” he wrote in an email to the Town
Crier.” Since they came back good, we will apply for waivers going
forward.”

During the review of the district’s assets and investments, the board
discussed the longterm liabilities for both its retirement plans and
other post-employment benefits. The district has no current liability
for the latter, but almost $700,000 for the retirement plans. The board
expressed interest in fully funding these as future budget plans are
developed.

During his monthly report, Jimenez suggested the board investigate the
merits of increasing its capital investment program (CIP) over the
short-term in order to reduce future costs, which could likely be
greater than doing the work now.

“It’s just something to consider being that costs have increased as much
as they have over the last 5 years,” he wrote in his email.

While this may require some short-term loans, he believes that long-term
savings would easily offset these interest costs. He stressed that
bigger projects yield savings by being completed sooner which reduces
the time contractors need to deploy equipment on the Hill. But he added,
“It will depend on the kind of interest that we will pay on the loan.”

“It’s worth exploring,” Jimenez told the board. “I’ll update the CIP for
the next 10 years as we begin the budget process.” This will be the
initial step in his evaluation of whether to borrow now in order to
manage a larger portion of the CIP sooner rather than in the future as
costs continue to grow.

During the Jan.-Feb. billing period, FVWD’s water production decreased
nearly a million gallons to 4 million from the same period in 2023.
Groundwater supplied about 60% of the total water in Feb. compared to
only 20% in February 2023. The other districts also had decreasing usage
this winter.

When asked what the cause might be, Jimenez replied, “I’m really not
sure. I would guess it’s a combination of different factors, less
visitors, more conservation awareness, perhaps a cooler climate for the
same period, possibly a reduction in construction activity.”