SLV district to seek substantial rate increase to complete projects
by Peter Burke
May 09, 2013 | 5710 views | 24 24 comments | 14 14 recommendations | email to a friend | print
The San Lorenzo Valley Water District administrative headquarters, shown here, would be consolidated with the operations facilities if a proposed rate increase goes through.
The San Lorenzo Valley Water District administrative headquarters, shown here, would be consolidated with the operations facilities if a proposed rate increase goes through.
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 San Lorenzo Valley Water District will seek a significant rate increase that will be spread over five years to fund several major projects and cover regular increases in operating costs.

The district hired Municipal Financial Services of Henderson, Nev., to complete a study to determine how high rates should be set when factoring in several upcoming projects.

The study, submitted to the district board in March, found the district’s rates would need to increase by 53 percent over the next five years to connect SLV’s water system with others to ensure supplies during an emergency and to build a new, centralized campus for the district’s administration and workforce. 

The increase would be staggered, with hikes of 13 percent in 2014 and 2015, and 9 percent in 2016, 2017 and 2018.

If the rate increase passes, the district’s gross revenue would increase from $6.4 million in fiscal year 2012-2013 that ends in June to $8.6 million per year by 2017-2018.

The district’s board of directors requested on April 18 that district staff move forward with the rate increase process.

The district plans a Proposition 218 rate hearing June 27 — according to Prop. 218, a taxpayer protection initiative passed by California voters in 1996, the rate increase will take effect unless more than half of the district’s 7,100 customers submit a written request by that date opposing the increase.

The district’s board plans to hold public outreach meetings to explain the increase.

Also, Prop. 218 requires the district to mail an explanation of the rate increase and how residents may protest it. The letters should arrive in the mail by early next week.

One board member, Randall Brown, has spoken out against the amount of the increase as it relates to the campus project.

He said the intertie project is necessary, but hopes the board will slow down on the campus project because of the large amount of money required from ratepayers.

The other board members have voted in favor of the increase.

 

Proposition 50 intertie project

The district hopes to spend $5.4 million in reserve funds to match $6 million from the California Department of Health to build an emergency intertie system in the valley.

The system would connect several local water districts to ensure water could be moved up and down the valley in the event of emergencies.

Interties would connect Scotts Valley’s system to SLV, Mount Hermon’s system to SLV, Lompico’s system to SLV, the Felton system to the rest of the SLV system and connect the SLV North and South systems at East Zayante and Graham Hill Roads.

 

District Campus project

Continuing a decades-long project, the district plans to consolidate its operations to a central location along Highway 9 in Boulder Creek.

Currently, the aging administrative office and operations building are on separate sides of the highway.

The district plans to borrow $6 million to be paid back over 20 years at a 2 percent interest rate, with the rate increase helping offset the cost. The district is currently developing specific plans to submit to the county requesting building permits.

AT A GLANCE

For a complete look at the rate study and proposed increase, visit www.slvwd.com and select the agenda for the board’s March 21, 2013 meeting.

To comment, email editor Peter Burke at peter@pressbanner.com, call 438-2500 or post a comment at www.pressbanner.com.

Comments
(24)
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Sam Nunez
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June 14, 2013
Dear SLVWD. Felton called. They want their water system back.
Carly Cuzack
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June 14, 2013
I thought that the SLV Water District warned us that if we didn't agree to pay $30,000,000 to hand Felton over to them, then CalAm would ship our water out of the district.

This intertie is about just that - shipping our water out of the district for sale.

That's frickin' outrageous!
Mark M
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June 14, 2013
That's right, Carly. They're positioning it as an "emergency only" system, because that's a requirement of the state Prop 50 / Chapter 3 grant money. But in the meantime they're in discussions with other regional water companies to move / sell valley water to SC, SV and Soquel districts.

The SLV Watchdogs, a community action group, has launch a website and a Facebook page to assist SLV Water customers in learning more about SLVWD's plans to jack the rates by 65%. We welcome your participation.

Facebook: San Lorenzo Valley Watchdogs

Website: slvwd.co (.co stands for Community Organization)
Steve Thompson
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June 14, 2013
Are you reading this Santa Cruz Sentinel? The Press Banner is willing to print the information.

Unfortunately the actions of the San Lorenzo Valley Water District do not fit the false narrative that the Sentinel crafted back in 2006 when it disreputably aligned itself with FLOW.

Pathetic.
Bart White
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June 12, 2013
What's the update on this rate increase? What is the justification for it?
Nan Gertie
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June 10, 2013
The Santa Cruz Sentinel made royal fools of themselves falling all over FLOW, creating a false story of grassroots that was really astroturf.

Do you think they might possibly ask questions about SLVWD cronyism, excessive rate hikes, poor water quality, funny grant programs, even funnier land deals, and a generally bad relationship with ratepayers?

Who woulda thought that in just a few years SLVWD would make Cal Am look like responsible stewards.
Mark M
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June 10, 2013
With the forced-abandonment of Intertie #5 of the Prop 50 Proposal (the SLVWD to Lompico connection) due to critical and educated comments by the public (Yes folks, they can be beat!), SLVWD has been forced into revising their Rate Increase arithmetic. It may turn out that the self-serving Campus Project at $6.4M becomes the most expensive item on their wish list. It will be interesting how they maneuver through that minefield during the upcoming public meetings.
Karen Mulligan
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May 23, 2013
I would caution attributing too much credit to FLOW. The water takeover effort was primarily run by the county of Santa Cruz bureaucracy with the willing partner San Lorenzo Valley Water District who, of course, was looking to get a $12 million water system for free...on the backs of Felton taxpayers.

FLOW were just the useful idiots who parroted anti-corporate slogans and pretended to be grassroots just to rile up uneducated voters.
Bruce Holloway
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May 23, 2013
It wasn't "for free." SLVWD paid $1.5 million in cash and assumed $2.9 million in debt to pay for the Cal Am water system in Felton. Here's the memo from the SLVWD district manager dated May 30, 2008:

http://www.slvwd.com/agendas/Full/2008/06-05-2008/Item 8a.pdf

That was a $4.4 million gift from the old ratepayers to new ones in Felton, on top of the $11 million approved by Felton voters. Present ratepayers continue to pay $186,798/year on the Kirby Street loan until 2027. Under existing water rights, not a drop of Felton water will ever go to the original ratepayers in Ben Lomond, Brookdale, and Boulder Creek.

Karen Mulligan
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May 24, 2013
Considering that SLVWD promptly piled on a significant rate increase to cover costs, a concept outlined in their consultant's recommendations BEFORE the Measure W election, I see the "for free" language as acceptable.

Further, didn't SLVWD assure their existing ratepayers that there would be no cost to them at all?

And didn't SLVWD boast about supplying their existing ratepayers with Felton's abundant water supply?

Funny how all this looks from the lens of 8 years down the road.
CAPPPR
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May 22, 2013
The California Alliance to Protect Private Property, California's leading private property rights organization, has been following the Felton case and others like it for years.

These FLOW groups, located throughout the state, promise the world and more to residents in local communities if they take over their private water company by eminent domain. They promise that water rates will go down and residents will have a greater say in the application of rate hikes. They promise immediate savings to residents. But where are they when these promises don't materialize? Where are they when their public water companies raise rates exorbitant amounts?

The political agenda of these FLOW groups is NOT lower water costs. The political agenda of these FLOW groups is public ownership of water NO MATTER THE COST to individuals or small businesses.

The worst type of eminent domain abuse is when taxpayers get fleeced. Felton taxpayers now know all too well what that feels like.

- California Alliance to Protect Private Property Rights

www.CalPropertyRights.com
Sarah Potter
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May 22, 2013
Wow. Thank you so much. Wish you had been an advocate for us Feltonians back when FLOW worked dishonestly with the local public water district and county bureaucrats to pull the wool over voters eyes.

Tom Raffaelli
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May 20, 2013
Do people forget what happened in the Felon takeover by SLVWD.The district told the Felton customers that they only raise the rates on average 2% per year and as soon as the ink dried they immediately passed a 35% rate increase.Where is FLOW now to prevent rate increases. ??

Jana Goodman
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May 17, 2013
Lompicans should organize. Your water district is a mess and your water board is seeking to merge with an even messier water district.
Felton Mark
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May 21, 2013
And don't forget, Lompico wants to borrow $111,000 from SLVWD to fund thier Retirement Fund. Since when is SLVWD a Bank ?!! Further, Lompico has a $904,000 obligation to CalPers (Retirement Fund) that SLVWD would have to take on if merged. This is snowballing down a rathole. Do you also wonder why there is a building moratorium in Lompico? Because there is a lack of reliable water supply. However, after the merge, or "intertie" I'm sure somebody must own property that could now be buildable...I'm just saying.
Alison Jaehnichen
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May 17, 2013
In response to "Lompico Lady's" comments regarding rate increases - the Lompico Water Board have repetitively told the SLVWD Board at the monthly Lompico Liaison Committee meetings, that they will need to dramatically raise your own water rates before possible annexation by SLVWD to cover your district's serious lack of funds to pay for upgrades to your system to meet minimal functionality system requirements comparative to SLVWD's system.

If the annexation between Lompico and SLVWD does go through, the new proposed SLVWD water rates will be applicable to you as a new SLVWD customer.

BTW, these monthly Lompico merger meetings are open to the public and the next meeting will be held today (5/17) at 2 pm at the SLVWD Operations Building in Boulder Creek - see SLVWD website for meeting agenda).

I implore my Lompico neighbors to attend one of these Liaison meetings to hear for themselves from their own Board members of the dramatic rate increases that they will be imposing in your Sept/Oct billing.

Felton Mark
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May 21, 2013
2pm in Boulder Creek on a weekday seems like a fair time to hold a meeting to draw public opinion...NOT. Hey, some of us have to work for a living, and driving all the way down to BC is not exactly a convenience. But maybe they want it that way. Then they can claim no one showed up in opposition. We should remember, they work for us.
Bruce Holloway
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May 17, 2013
At the board meeting last night, the district manager said the rate increase notice had not been sent out or even written yet and the public outreach meetings had not been scheduled. Staff has been focused on consolidating with Lompico County Water District and state legislation about timber harvesting. The Prop 218 process requires 45 days notice, so apparently the five-year rate increase won't begin on July 1 as planned.

Eric Rubaker
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May 14, 2013
These clowns already voted themselves a rate increase. I hope everyone joins in and votes this down. We already pay too much for water, these guys just want a fancy new complex.
Dawn Chace
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May 14, 2013
Better yet, start working now on a slate of 3 to take over the directors whose terms expire in 2014.

But, mark my words, one of them will resign for a manufactured reason so they can appoint a "friendly", thereby keeping a majority on the baord. They do it all the time.
Luisa Smith
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May 14, 2013
53%? Looks like it's much higher than that!
Mark M
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May 14, 2013
53% is the “political arithmetic” provided by SLVWD. Rate payers will actually be hit with a 65% rate increase over the 5 year period. That equals an average increase of $249 a year, every year, for every residential rate-payer in the SLVWD area. What are you going to have to sacrifice so SLVWD can build themselves a shiny new $5.5M complex? Pay attention to this one, folks. Attend the Prop 218 community discussions and voice your concerns / outrage. Then VOTE IT DOWN!
Bruce Holloway
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May 16, 2013
The 53% rate increase quoted in the article was from 2007 to 2012.

Rates were increased as follows:

10% on July 1, 2007

12% on March 15, 2009

8% on March 15, 2010

15% on June 1, 2011

A 15% increase on top of an 8% increase on top of a 12% increase on top of a 10% increase compounds to 53%.

Mark M is correct that the rate increases for 2013 to 2017 approved by the SLVWD board on March 21 compound to 65%. Rates will increase on July 1, 2013 to 2017, the first day of "fiscal years" 2014 to 2018 as stated in the article. The cumulative increase from July 1, 2007 to July 1, 2017 will be 153%. That's 10% per year for a decade.

Table 3-2 on page 3-2 of the rate study calculates the cost of the campus project using a "biannual rate" of 2%. That means 4% per year.

Lompico Lady
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May 16, 2013
So much for the merge cry of "lower rates" and "saving money" if Lompico merges with SLV. I believe this will put SLV's rates right up there with Lompico. Simple math equation - If you pay $100 per month now you will be paying $165 by 2018, which is a compounded 61% hike.

At the last "merge" meeting SLV also indicated that even if we merge that our rates will not be changed, except one would assume, to go higher.

Be careful what you wish for!


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