The San Lorenzo Valley Water District ratepayers have begun to compare SLVWD to CAL-AM. Why? It is because the proposed 65% rate increase is reminiscent of those days when CAL-AM asked for similarly high rate increases. With that comparison in mind, I met with Director Randall Brown on Thursday morning, 10/17/13, prior to the board meeting. I asked him if there were other solutions to the district's current proposal that would result in a lower rate increase and if so, what would it look like.
Director Brown's considered response was reasonable. He pointed out that the investment in the wetland properties was at least recoverable as opposed to the what SLVWD had lost as a result of their investment activity in the bond market. The properties purchased for the Campus Project, currently referred to as the Administrative Consolidation, could be sold and those funds could be made available to improve the water delivery infrastructure.
I asked if we really needed this new administrative complex. He said that 'different' office space was warranted. He expressed his concern for the ladies who work in the office currently owned by SLVWD and agreed that it was unpleasant. He said that it is not necessary to subject them to their current working conditions. Should the district want to do so, they could rent or lease other facilities. Further, they could relocate their office and operations center such that they would be decentralized. That decision would better serve all of the ratepayers. It would also save the ratepayers about $9 million dollars in development and loan costs and an unspecified future maintenance cost. Renting or leasing premises in a different location could also protect the wetlands from the impact of the planned gas station. "After all" he said, "we are supposed to be in the water delivery business. We are not in the gas and oil business. We don't want to forget that we are a rural district with about 7000 ratepayers and we only have 24 employees."
When asked if he had any reservations about the Inter-tie system, Director Brown expressed the validity of connecting the Felton area to the Boulder Creek and Ben Lomond water delivery system. Apparently, there is no financial benefit from the other planned interties and he explained that the investment cost would not yield a proportionate benefit. Removing the other interties could save a substantial amount for the ratepayers.
My next question was "what would a different rate plan look like if those projects were eliminated from the list of actual infrastructure projects?" Director Brown stated that a plan "B" could ask for a 13% increase for only one year. They could freeze any more spending on the Campus until after the 2014 election when the next board members will be elected. They could also drop the Campus project entirely. The intertie system could be reduced to just tying Boulder Creek to Felton. This would provide the funds to apply to the infrastructure.
Director Brown is very concerned about the 'ripple effect' that the current proposed rate increase could cause to the economics within San Lorenzo Valley. The majority of ratepayers are low to middle income families who do not have the discretionary income to fund the Campus Project and the intertie system. He envisioned that property owners who rent residential property will raise rent to cover the increased water costs. When costs escalate for other water dependent businesses, they too will most likely have to pass these costs on by raising prices for goods and services.
When asked about how the infrastructure projects are prioritized, Director Brown just smiled and indicated that this was a subject that needed attention. He observed that if the money that had been spent to acquire property, permits and land development for the Campus been spent on infrastructure, the current list of undone projects would be much shorter.
Last night, at the 10/17/13 Board meeting, rate payers filled the room to capacity to express concern over the massive amount of the proposed rate increase. In the absence of Director Vierra, Director Rapozza ran the meeting. He addressed the rate payers concerns about the rate increase. He suggested that the district could modify the proposed rate structure and remove the Campus project from the equation. Directors Brown and Bruce made similar comments. Only Director Prather stated that he was in favor of moving forward with the Campus project and current rate increase proposal. He stated that he had spent 10 years in planning for the Campus and if it was not completed at this time that it may be too expensive to do so in the future.
Although no substantive set of alternatives was described, the SLVWD Board of Directors has expressed that it may reconsider revising the proposed rate increase structure. We do not know if a new plan will include any of the options that Director Brown suggested, but we are all agreed that the infrastructure does need to be upgraded and properly maintained. Some rate increase is warranted, it is the amount that remains in question.