Lompico water considers rate hike

Lompico Water District directors are considering raising the ready-to-serve water rate by $15 every two months to help maintain the financial health of the district.
For the average rate-payer, the once-every-two-months bill will increase from $95 to about $110.
However, a rate increase alone will not solve the district’s financial woes.
“Whether it passes or not, we need to cut expenses,” board president Rob Hansel said.
The district’s board of directors discovered that district expenses have exceeded revenues for the past several years, fully depleting its general fund, capital improvement fund and reserve fund — dire straits for a district with only 500 connections.
The district operates on a $400,000 per year budget but has less than $1,000 in reserve, Hansel said.
It has reached the point where the general manager and district secretary will write checks and put them in the district safe until the money comes in to pay the bills, Hansel said.
Where has the money gone?
Water sales have decreased and revenue in the past two years has gone down by more than $40,000, and the district spent about $60,000 on engineering costs related to the Lake Boulevard washout.
However, two-thirds of the district’s budget relates to its employees.
“It comes down to employee costs, I believe,” Hansel said.
Until two years ago, the district had been paying about $200,000 for employee costs for payroll, sick time, overtime, vacation and benefits.
Then in 2007, the cost went up to $228,000, and last year it was $262,000, Hansel said.
For the past six months, the board has been working to figure out why.
“Right now, we’re trying to get to the bottom of this,” Hansel said. “We’ve been stonewalled every step of the way.”
“The manager has not presented all the facts and figures to the board,” Hansel added.
The board is also looking to monitor all the bills that are paid by the district, Hansel said.
Cuts on the horizon
In a letter to customers outlining the rate increase, Hansel said the board is determined to make cuts in expenses by investigating each expense, item by item, to trim costs.
Hansel said that 10 years ago the board of directors set up a retirement account for the district manager that depleted district funds. The district manager is salaried but also earns overtime — a total of $330,000 in overtime costs in the past 10 years.
The board met with a labor attorney to discuss how to fairly compensate its employees.
“The human relations committee is coming up with a (new) contract for our manager,” Hansel said.
The board will also look for a new insurance carrier, Hansel said.
Lompico residents can protest the rate increase by submitting a letter to the district with the address and parcel number of their property stating that they are against the increase. If more than half of the 500 connections protest by June 8, the board is required to nix the increase.
At a glance
WHAT: Rate increase public information meeting
WHEN: 7 p.m. May 14
WHERE: Zayante Fire Station, 7700 E Zayante Road, in Felton
INFO: 335-5200