Lompico, SLV water merger plan presented

Staffers from the County of Santa Cruz presented two options last week that would determine two drastically different futures for the struggling Lompico County Water District.
A December 4 joint informational meeting between San Lorenzo Valley and Lompico Water District at Zayante Fire Station provided information about what a merger between the two districts would look like financially, and to some extent, logistically. The county also presented a separate path for Lompico residents to maintain control of the district, at a significantly higher cost to its customers.
Local Agency Formation Commission executive officer Pat McCormick presented both options that were developed by a working group made up of County Administrative Officer Susan Muriello, County Analyst Christina Mowrey-Riggs, 5^th District Supervisorial Aide Robin Musitelli, County Water Resources Manager John Ricker, McCormick, SLV Water District General Manager Jim Mueller and Operations Manager Rick Rogers, Lompico Water Board President Lois Henry and board member Rick Harrington.
Option 1: Independent Lompico
Under this option, Lompico County Water District’s 500 customer district would remain independent from SLV and implement a $1.1 million capital improvement program that would — using a pay-as-you-go model — make minor improvements to Lompico’s wells, replace three aging leaky water tanks, begin to replace outdated meters and piping, valves and repair pump stations and install a full SCADA system to electronically monitor the water system. The district does not currently have a general manager, so a manager is budgeted in with this plan.
This option does not include an emergency intertie between Lompico and SLV nor any additional wells or sources of water for the district.
With this option the district would need to raise its rates. The county estimates that the average bi-monthly water bill will increase from its current rate of $183 for fiscal year 2014-2015 to $227 during the same time period under the new plan. Money from water rates, rather than a bond measure, would pay for the improvements. Under this option, the district would be able to make $211,000 worth of improvements each year going forward.
Option 2: Merge Lompico with SLV
With this option, Lompico residents must pass a $2.75 million bond measure co-signed by the county in order for SLV to agree to merge the two districts. The bond monies would replace all six tanks in the district, replace all meters and two-thirds of laterals, install a full SCADA monitoring system and build an emergency intertie between SLV and Lompico. The intertie, according to both districts could only be used to move water in emergency situations, like a fire or earthquake, unless further studies environmental studies are done to make it a full-service intertie.
The nearly complete overhaul of the system would be made within approximately 5 years under this option.
The $2.75 million bond, likely at a 5 percent interest rate to be paid for over 30 years, could be structured on property tax bills in several ways. One option is to have lower payments now with payments gradually increasing each year. Another option would be to have even payments throughout the 30-year life of the bond. The average bi-monthly water bill for customers would be $149 in fiscal year 2014-2015, down from $183. However, SLV has requested a bi-monthly $51 ready to serve charge capped at five years that would help with the cost of upgrading all the meters in the district. In total, customers would pay $185 to $249 per month to merge with SLV after the ready to serve charge for the first five years, until the $51 ready to server charge was dropped.
Option 3: No change
Ricker was adamant that standing pat is not an option for Lompico’s district.
“The status quo can’t continue,” he said. “The state department is really going to be tightening the screws.”
Lompico has received a series of letters from the California Department of Public Health this year specifying water quality issues that must be mended and according to the county, has about $1.4 million in deferred maintenance, without any money budgeted to mend the problems that exist.
“It’s kind of like we’re living paycheck to paycheck,” said Lois Henry, Lompico’s board president.
The political leanings
SLVs board members each stated they were generally in favor of the merger if Lompico passes the $2.75 million bond. Without it, SLVs board will not consider merging. Lompico board member Sherwin Gott questioned many of the costs of merging, and the other board members, with the exception of Shannar Abraham, who was absent due to illness, were generally in favor of merging with SLV.
Ricker along with Mary Jo Walker, a Lompico resident who lives outside the district, both said merging the two districts makes sense.
Ricker recommended merging because of the water quality issues in Lompico and the ability to have a second source of water in the event of emergency. Walker said her office has done the bills for Lompico since soon after it fired its general manager without a replacement 3 1/2 years ago.
“There’s a size when you’re just too small,” Walker said. “Lompico is just too small to function efficiently.”
For SLV, merging would increase the district from 7,300 connections to close to 7,800.
SLV’s board president Terry Vierra called Lompico a “liability” to SLV because Lompico does not come with an abundant water supply, while board member Jim Rapoza disagreed, saying an increase to 7,800 connections cannot be taken lightly.
No decision has been made, as both SLV and Lompico’s boards must make resolutions to apply to LAFCO in order to merge. After a protest hearing, Lompico must hold a bond election with 2/3 approval to move forward.
– A more detailed description of the presentation and numbers provided by the county can be found at SLV Water District’s website, www.slvwd.com.