Water rates could rise 7 percent, sewer 4.5 percent

By Karen Brainard

Water rate increases will not exceed 7 percent and sewer rates will not rise more than 4.5 percent, beginning July 1, for customers of the Ramona Municipal Water District.

The Proposition 218 letter with not-to-exceed rates, scheduled to be mailed to customers the week of May 6, was approved by the RMWD Board of Directors by a 4-1 vote on April 23.

RMWD Finance Manager Richard Hannasch noted that 7 percent would be the maximum increase for water; the possibility exists that it could be less.

That figure was derived from information released by the San Diego County Water Authority, RMWD’s sole water supplier, whose next fiscal year begins January 2014. RMWD’s 2013-14 fiscal year starts July 1.

“The rate guidance that we got from the county water authority (CWA) for the upcoming year is still very preliminary,” Hannasch told the board. “They don’t decide on their rates until June. The preliminary guidance is about a 7 percent increase.”

Hannasch said RMWD hopes that the water authority’s increase will be less.

By state law RMWD must mail a Proposition 218 notice to customers with not-to-exceed rates at least 45 days before its public hearing on the proposed rates. The public hearing is set for June 25, six days before the new rates would go into effect.

The proposed treated water rate would rise by 9 cents per unit, and untreated by 7 cents. The bigger increase would be in the electrical pumping charge, which could jump from 65 cents per unit to 92 cents. Hannasch said the electrical charge includes other costs incurred at the district’s Poway Pump Station, which pumps water from CWA lines up the hill to Ramona.

The proposed combined water and electrical charges add up to $5.59 per unit for treated water, and $4.92 per unit for untreated water. A unit is about 748 gallons of water.

Also proposed is a 5 percent increase for the monthly water service fee.

The water district uses a basis of 14 units of water every two months for an average household to illustrate a comparison of current versus proposed rates. In that scenario, Hannasch said the bimonthly bill would climb about 6 percent or by $7.74.

Agriculture customers in the county water authority’s Special Agriculture Water Rate (SAWR) program could see an 8 percent rate hike.

With sewer rates proposed to increase 4.5 percent, customers of San Vicente wastewater plant would pay $605.30, while those served by Santa Maria wastewater plant would be charged $637.22. The charges are billed annually on property tax bills.

Director Kit Kesinger, who voted against approving the Prop. 218 letter, questioned whether the rate for San Vicente adequately funds the sewer plant, as some of the district’s property tax revenue went to that facility.

“We’ve been putting tax dollars at a rate of approximately a million dollars per year to the San Vicente sewer district,” he said. Last year the amount was about $802,000, he added.

Kesinger said the district reported the majority of those funds went to brine hauling and debt service at the San Vicente plant.

“No matter how you slice this, this is basically taking money from one part of the community — taxpayers — and taking that money and giving it to another part of the community, which is San Vicente sewer district,” he said, questioning whether that is appropriate.

“There are taxpayers who are not on sewers who will never get this special expenditure for their benefit,” he said.

Hannasch said the board directed a portion of its property tax allocation to be used for debt service at San Vicente. That debt is expected to be paid off by November with a final amount of $171,000, he said, and brine hauling will be paid through the operations fund.

Board President Darrell Beck told Kesinger his discussion was drifting away from the agenda item.

But Kesinger disagreed. “If we approve these not- to-exceed rates today, then I believe it closes out the option for the board to decide on how tax dollars will be spent. Because if the San Vicente sewer district is not adequately funded from other sources of revenue, then our tax dollars have to be spent.”

Kesinger’s motion for staff to come back with a revised Prop 218 notice failed 3-2, with Director Rex Schildhouse voting with Kesinger.

Kesinger then moved to raise San Vicente’s rate to equal the Santa Maria rate, which also failed by the same vote. RMWD General Manager David Barnum said legally the board cannot arbitrarily raise rates.

Beck then moved to approved the Prop 218 notice. Schildhouse joined Beck and Directors George Foot and Joe Zenovic in supporting it.

Barnum told the

Sentinel

that the debt service at San Vicente was due to adding a reverse osmosis system several years ago, and purchasing property for a brine pond. Of the $4.1 million in property tax revenue received by the district for the current fiscal year, Barnum said just over 50 percent funded the fire department, about $800,000 was paid toward San Vicente debt service, and the remainder went to other areas of district operations.

The Prop. 218 letter also notifies customers that the board will consider an ordinance to pass through future increases in the wholesale cost of water from CWA and in electricity costs from San Diego Gas & Electric with the total impact over a three-year period not exceeding a 35 percent increase.