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Water board approves $37 million budget

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Ramona Municipal Water District Board of Directors approved a $37 million fiscal year 2015-16 budget that includes several capital replacement projects but could fall short of estimated water sales revenues.

In the 4-0-1 vote Aug. 11, Director Jim Hickle abstained, saying he had just received the budget proposal on Friday, Aug. 7, and wanted more time to review it. Hickle told the Sentinel the board typically receives its meeting packets the Thursday or Friday before the meeting.

The budget, usually approved before the July 1 start of the district’s new fiscal year, had been delayed so the district could receive water rate guidance from the San Diego County Water Authority, RMWD’s sole water supplier. Just before the budget discussion, the board approved a 14 percent potable water rate increase by a 4-1 vote with Hickle the lone dissenter.

The budget for the water fund includes $2.8 million for the San Vicente Road pipeline relocation, and $1.2 million for tank maintenance, pump and valve replacements. The total cost to relocate the San Vicente pipeline, the primary source of water to San Diego Country Estates, is estimated to cost $5 million. RMWD entered into 15-year debt financing last year to help fund the project; $384,810 of property tax revenues will go toward that debt service.

Hickle questioned the 2015-16 estimated water sales revenue that is about 8 percent higher than what was anticipated for 2014-15.

“We are concerned about whether revenues from water rates will decline further,” said Richard Hannasch, RMWD chief financial officer. “This budget was based on the estimated 10 percent reduction, which is probably not enough.”

If water sales revenue declines more, Hannasch said the board will have the opportunity to dip into the rate stabilization fund. The budget includes transferring $335,000 of property tax revenues to the rate stabilization fund to bring its total to $1 million, he said.

The district is estimating it will receive $5 million in property tax revenue, with about $2.47 million of that going to the fire operations fund. Cal Fire’s contract to provide fire and paramedic service increased 9.7 percent this year so the budgeted amount is $5.95 million.

“So right off the top, about half of the property tax revenues go to fire,” said Hannasch.

Capital replacement projects for the wastewater service areas include $1.8 million for a clarifier at the Santa Maria sewer plant and $1 million for a reverse osmosis project that will improve production of recycled water at the San Vicente plant.

Before the budget discussion, a customer asked how much the district is saving on pumping costs, since it is pumping less water.

The board cannot respond to public speakers; however, RMWD General Manager David Barnum later explained that pumping is on demand, so there are no savings.

“This agency essentially charges our costs to its customers. If we incur costs to pump or incur costs for water, that’s because we’re supplying that on demand,” he said.

Although Hickle asked if the budget adoption vote could be postponed so he could further review the document, staff said the district was already into its sixth week of the new fiscal year.

Barnum said the budget is not a commitment to spend, but provides guidance to staff and is important for lenders.

Director Thomas Ace said the board’s primary responsibilities are: 1) adopt a formal budget; and 2) hire, evaluate and give guidance to the general manager.

Ace said that in the future the board treasurer, the position held by Hickle, should be more involved in the formulation of the budget so he can give his overview to the board prior to adoption. The position recently has been mostly ceremonial, said Ace.

Darrell Beck, board president, said that could be considered.

In other business:

•The board adopted the 2015-16 fire mitigation fee multi-year facilities and equipment plan. The fees are collected by the county from new development and earmarked for fire facilities and equipment.

Ramona Fire Marshal Steve Foster said they are using the money to pay off the debt for Fire Station 82 improvements. Of the fund’s estimated balance of $93,000, $88,000 will be used for debt payment. The final debt payment is expected to be paid in fiscal year 2016-17.

•The board authorized awarding a contract of $226,466 to New Vision Building & Design, the lowest bidder, to extend the garage at Fire Station 81 in the Estates.

Richard Uribe of The Richard Group, the second-lowest bidder, protested, claiming New Vision broke state law by not listing its subcontractors.

Foster said Uribe’s protest letter had been submitted to legal counsel for review and staff research showed New Vision has certified employees to perform such work as electrical and roofing, and does not use subcontractors.

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