Guest commentary: Apparent gaps in understanding
Hello. My name is Thomas Ace and I am the current president of the board of directors of the Ramona Municipal Water District (RMWD). I wanted to take a moment to try and clear up some statements made in a recent guest commentary in this publication titled “Rate hike unnecessary” authored by Mr. Doug Kafka. Mr. Kafka is the vice president of the San Diego Country Estates Association Board of Directors and a candidate for the RMWD Board of Directors.
Respectfully, the author does not seem to have done the appropriate research and has several major gaps in his basic understanding of the facts, the requirements of a public agency, recent events or the long-term policy of the RMWD. I hope my response will help educate him and the public on some of these issues. Ultimately, I hope to encourage a civil and educated discussion on the issues to ensure transparency to the public in the upcoming election.
To begin, the author seems unaware that the RMWD Board of Directors did not raise water rates this July for the first time in several years. His guest commentary refers to sewer rate increases only.
The sewer rates include both an operational component and a capital component. The current operating and future capital requirements and the associated rates to achieve those requirements have been determined through a lengthy public process including Facility Plans and Rate/Fee Studies performed by neutral third party experts. The capital component of the rates will help pay for the tens of millions of dollars of deferred maintenance in our sewer systems. Making no capital investments in maintaining the existing sewer infrastructure will ensure that the sewer facilities will eventually fail.
The author may not understand that there is no such thing as a “windfall” of “profit” in the public sector. The SDCEA is in the process of paying the fees necessary to meet its sewer and water needs. These are the same fees that were determined by the Rate/Fee Studies. They are consistent with the fees paid by all customers and all sewer rates and fees are invested in sewer infrastructure. In the public sector, services are provided at cost; there is no “profit.”
The author may not understand the concept of “Pay Go” or “reserves.” In order to not spike rates dramatically in years where capital investments are required, the board has traditionally raised rates at sufficient minimum levels to increase the appropriate fund balances to pay for the required capital investments. This methodology also reduces debt service costs. Therefore, fund balances are not necessarily reserves, and comparing total fund balances to “reserves” is not accurate.
No one recalls the RMWD chief financial officer saying “there was no hardship if there are no increases this year.” The staff recommendation was to approve the rates and fees.
Finally, the author accuses the RMWD Board of “fat budgets and excessive reserves,” spending on a “Wish List” and that the District “should make improvements to the infrastructure on a well-planned and controlled basis; not just because we have a large surplus in our reserve fund.” These comments are clearly contradictory and reflect the author’s apparent fundamental lack of understanding of the district’s finances, long-range planning, the regulatory requirements of a public agency and long-term board policy.
The RMWD has years of deferred maintenance projects in areas that can no longer be ignored. To do so would risk the ability to provide vital services to the community.
The RMWD Board does not take rate increases lightly and understands deeply the concerns of the Community of Ramona. While rate increases in an election year may be unpopular, the board must rise above petty election year rhetoric and continue to evaluate what the most responsible action is to ensure essential services are available to the community now and in the future. The long-term viability of Ramona relies on informed policy makers with the vision and courage to make well-planned investments in Ramona to insure that the community will continue to thrive into the next generation.
Thomas Ace is president of the Ramona Municipal Water District Board of Directors.