By KAREN BRAINARD
For the first time since 2003, the Ramona Municipal Water District will not be increasing the cost of treated water rates, said Assistant General Manager David Barnum.
Barnum presented a draft budget for 2011-12 to the water district’s board of directors at its July 12 meeting.
While treated water rates will not see a hike, other charges are proposed to increase.
Those charges include a water service fee for customers of treated water, the untreated water rate, and a 3 percent increase in sewer rates.
Barnum sought approval from the board for the Proposition 218 letter to customers with the proposed not-to-exceed rates. The letter, required by state law, must be sent to customers at least 45 days before the public hearing on the budget, which RMWD has set for Sept. 13. The new rates would go into effect Oct. 1.
After the Prop 218 letter is sent, the water district can still reduce proposed fees, but legally cannot raise them, said Barnum.
Barnum explained that the budget was delayed this year, about three months, to have a third party consultant conduct a water rate study.
Raftelis Financial Consultants Inc. of San Diego performed the water rate study, proposing a 19-cent per unit decrease in the general treated water rate. That decrease, though, is offset by a 19-cent increase per unit in the electrical rate, as recommended by Raftelis, Barnum said.
RMWD’s water, purchased through the San Diego County Water Authority, is pumped 1,000 feet “up the hill” to Ramona from the district’s Poway Pump Station.
“So for the treated customer, their cost of the commodity and pumping will not change,” Barnum said.
The cost to receive treated water will remain at $4.63 per unit. A unit of water is about 748 gallons and an average family is said to use about 14 units of water every two months, said Barnum.
Although treated water users will not see a hike in rates, an increase in the water service fee is proposed. This fee is intended to cover infrastructure costs and is explained on the back of a water bill, said Barnum.
“We are not charging enough to cover infrastructure costs,” Barnum said they were told by Raftelis.
The cost of the fee depends on the meter size. An average single family home uses a 5/8 size meter, which is charged $20.72 per month. Raftelis suggested that be increased to $24.34 per month.
Customers receive their bills bimonthly so an average family could expect to see an increase of $7.24 on their bimonthly bill for the water service fee for treated water. The yearly increase would amount to $43.44.
The cost for untreated water is proposed to increase by 60 cents, from $2.71 to $3.31 per unit.
Avocado grower Mike Dillon addressed the board, saying he and other agricultural customers are concerned about the jump in proposed rates for untreated water.
“I’m telling you, people are going to go out of business,” he told the directors.
Dillon said farmers are struggling to do business.
“Everybody’s losing money,” he said and asked if there was a possibility to phase in an increase.
Director Red Hager said that the board was not approving the rate increase at this time and residents will have their chance to voice their protests at the Sept. 13 hearing. Comments also may be submitted in advance.
Dillon asked to view the rate study prepared by Raftelis. Barnum complied, but said the consultants prepared a complicated rate model. Barnum said the district provided water data and other information to Raftelis, which then used its methodology to come up with the calculations.
RMWD Legal Counsel Sophie Akins also said there are legal restrictions on how the board determines rates.
Raftelis was hired to prepare a water rate study, but the district did not have the money to have a wastewater rate study prepared for this fiscal year, said Barnum.
A 3 percent increase is proposed for customers of both the Santa Maria and the San Vicente wastewater reclamation plants. That would mean that annually San Vicente customers would pay $562.15 and Santa Maria customers would pay $591.79.
Director Kit Kesinger noted that a portion of property taxes goes toward paying for brine hauling at the San Vicente plant. He said those taxes come from the entire community but that portion is only benefitting San Vicente customers.
He also questioned why the San Vicente fee is lower than Santa Maria, especially when both plants have about the same amount of customers.
Barnum said that has been a board decision. Director Darrell Beck said the two plants are different systems.
Kesinger suggested increasing the San Vicente sewer fee to match that of the Santa Maria customers to help pay for the brine hauling. The savings in property tax revenues could then be re-allocated, he said.
Director Joe Zenovic said doing that would bring in about $120,000, or one-third of the cost of brine hauling.
Akins cautioned that to make such a change, staff must be able to justify a reasonable basis for it.
Kesinger made a motion to set both sewer rates at $591.79, but it failed 2-3. Kesinger and Zenovic voted yes, but it was opposed by Beck, Hager and Board President Bryan Wadlington.
Zenovic said there is a “tremendous shortfall” in fire funds. The money for fire is paid from customers' fire EDU (equivalent dwelling unit) charges of $188.52 per EDU, a portion of property tax revenues and about $600,000 billed for ambulance services.
Property tax revenues for the district are projected to decline from $4.6 million to $4.25 million for 2011-12, which represents a $1.05 million decline since fiscal year 2008-2009. Barnum said the fire EDU rate hasn’t been changed in 15 years but to do so would require a vote of the people. A special election is too expensive for the district, he said, so they would need to wait for the state to hold a special election or for the general election next year.
Proposition 218 letter
The letter was approved by the board, 4-1. Director Kesinger voted no.