FVWD to consider capital projects and budget levels

The April 18 meeting of the Fern Valley Water District (FVWD) Board of
Directors focused mostly on financial issues and preparation for the
next fiscal year (FY) budget.

The third quarter report for the current budget (FY 2023-24) was on the
agenda. For the year, expenses exceed revenue by about $835,000, which
is about what the board expected when it approved the budget in June
2023.

The approved budget projected a deficit of $870,000, the result of a
large capital improvement (CIP) budget. This year, the capital budget
was planned to be $1.3 million of which $1.27 million, or 96%, was for
the pipeline project on Howland, Cougar and Silver Tip. This is
completed and was slightly under budget.

In contrast, the capital budget for FY 2022-23 was $145,000, of which
75% was for hydrant and water monitoring equipment upgrades.

The capital expenses have taken a toll on FVWD’s assets. Net assets have
declined about $800,000 since July, due to the pipeline project expense.
But with water sales, although down slightly, and property tax revenue,
April’s total assets were about $1.1 million, up $200,000 since the end
of 2023.

At the last several meetings, General Manager Vic Jimenez has told the
board he would like them to consider larger (CIP) budgets for the next
several years. Even if borrowing funds is necessary, he believes there
will be long-term savings if the work is completed sooner.

“It’s just something to consider being that costs have increased as much
as they have over the last five years. It’s worth exploring,” Jimenez
told the board in March. “I’ll update the CIP for the next 10 years as
we begin the budget process.”

But he added, “It will depend on the kind of interest that we will pay
on the loan.”

The board expects to have its Planning Committee meet this week and the
Budget Committee will schedule a meeting later this month to submit a
proposed FY 2024-25 budget for review at the May meeting.

President Jon Brown also indicated that the Rate and Revenue Committee
may schedule a meeting in the next few months.

Jimenez did note that the March expenditures for water quality
monitoring were about twice the planned amount. With higher-than-normal
flow in the district’s creeks — Strawberry and Tahquitz — more
monitoring of turbidity and stream flow content has had to be increased
and become more vigilant.

The amount of turbidity has limited FVWD’s ability to use stream water.
In his General Manager’s Report, Jimenez reported that ground water has
supplied about 98% of March’s water supply.

Also, FVWD has had to begin monitoring both well and stream water for
synthetic organic compounds. “These are another class of human-made
contaminants that may be present in ground water. Collectively, this
group includes herbicides, pesticides and other chemicals that come from
agriculture, urban storm water runoff, or industrial activities,” Jimenz
said in an email to the Town Crier.

Overall, the district is in good shape, according to Jimenez. March
water production was down about a million gallons compared to last year.
Stored treated water is at about 90% of available storage. Due to the
rapid creek flows, raw water storage currently is at 0%.

“Things are going very smoothly,” Jimenez told the board. “We’ve been
pumping more from the wells the last couple of months and the mountain
is definitely replenishing well water.”

Idyllwild Fire Chief Mark LaMont visited the FVWD meeting and thanked
the board for the great relationship between the two organizations.
Noting the frequent cooperation, he said, “Thanks for ensuring
thoughtful personnel willing to get out and help.”

Besides consideration of the FY 1024-25 budget at the next meeting,
Brown noted that the 12-month certificate of deposit will be expiring in
May and a decision on whether to renew it or transfer some cash to the
Local Area Investment Fund (essentially a savings account held by the
state) will need to be made.

A representative from FVWD’s legal counsel, Best, Best and Krieger, is
expected to attend the May 16 meeting.