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Board approves sewer rate hikes

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Twenty cents more a day — that’s what the typical sewer customer will pay with the sewer fee increase, said one Ramona Municipal Water District director.

Acknowledging that people do not like rate increases, Director Joe Zenovic said, “You want to know that your toilet is going to work when you flush it, and we have to have the money to assure that. And 20 cents a day over a whole year is 70-some-odd dollars. That’s about what we’re asking for.”

Customers of the San Vicente Sewer Service Area will see a 7.5 percent increase with the annual charge rising from $670.54 per equivalent dwelling unit (EDU) to $720.83. Santa Maria Sewer Service Area customers will be charged 6 percent more, from $716.32 to $759.30 per EDU.

The rate increases are based on a 2014 rate and fee study prepared for the district by Bartle Wells Associates. The report recommends 6 percent rate increases each year until about 2024 for Santa Maria customers and 7.5 percent annually until 2020 for San Vicente customers.

By a 4-1 vote on June 14, the board approved the sewer fee increases that will become effective July 1, the start of the district’s 2016-17 fiscal year. Director Jim Hickle voted in opposition after recommending the rate increase be deferred until next year because it appeared from accounting statements that 10 months into the budget the district underspent about $425,000 for the two sewer areas. Hickle, who commended wastewater staff for its operation of the facilities and stretching out use of equipment, said staff was able to defer 90 percent of capital replacement projects. He added that the sewer plants meet the minimum cash reserves recommended by the rate and fee study.

Before the meeting’s public hearing on the proposed rates, an overview of the facilities plans for both sewer plants and planned capital improvement projects was presented by Mike Metts, the district’s contracted engineer. The plans include approximately $14 million worth of remaining projects for Santa Maria and about $4 million for San Vicente. Alex Handlers of Bartle Wells presented information on the rate and fee study and financial projections to pay for those projects.

The public hearing followed, starting about an hour into the meeting and drawing five speakers, although four — Doug Kafka, Rex Gammon, Pete Bakarich and Jim Piva — presented their opposition as a group. Also speaking against the rate increase was Gary Hurst. According to the district, it received 18 protest letters from among the 7,000 parcels it serves.

One concern voiced by several was the district’s proposal for a rate increase before presenting a new budget.

“Without a budget how can the need for a rate increase be properly assessed?” said Kafka.

Historically the board adopted a budget and any rate increases in June prior to the start of the new fiscal year. Last year the board approved sewer rate increases in June, two months before adopting a new budget.

“We need to know rates before finalizing the budget,” said Richard Hannasch, RMWD chief financial officer, during his report after the public hearing.

David Barnum, the district’s general manager, told board members they would be receiving a draft of the new budget at the end of the week to have time to review it and a chance to ask questions at their July 12 meeting.

Public speakers also questioned whether the district was trying to maintain an excessive amount in reserves.

Thomas Ace, board president, said he understands public agencies have a statutory requirement for certain levels of funds and reserves and some base their reserves on a percentage of their one-year operating expenses.

“Are our reserve levels adequate to meet the needs — not excessive but not underfunded?” he asked Handlers.

Handlers said the district’s reserves look to be in a reasonable range.

After the board passed the rate increase, directors unanimously approved continuing the sewer availability charge for property in the San Vicente Sewer Service area, not to exceed $10 per acre per year or $10 per year for a parcel less than an acre. The fee brings in annual revenue of approximately $37,000, according to the district.

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