After a year of shakeups and a strong recommendation by the county grand jury, the Lompico County Water District is exploring a way to merge with the neighboring San Lorenzo Valley Water District.
The 500-customer Lompico District has set in motion a process that could result in joining the larger, 7,300-customer water district as it seeks to replace leaky tanks and failing pipes, get out of debt and manage the district more consistently.
The Lompico board asked the larger district to present the costs associated with a merger during a July 8 community meeting. About 100 Lompico residents attended the gathering at the Zayante firehouse. No decisions were made, but Lompico’s five-person board of directors will likely discuss what steps to take at its next meeting, Tuesday, July 20.
The July 8 meeting was for informational purposes, but the four Lompico board members in attendance seemed to lean toward joining the larger district.
“If one of the tanks blows or one of the wells croaks, we’re in trouble,” Lompico board president Lois Henry said.
The district has no reserves and no plan in place to build up a reserve fund, Henry said.
Jim Mueller, San Lorenzo Valley Water District’s general manager, presented his district’s evaluation of Lompico, including what a merger would cost customers.
The cost of a merger
An agreement proposed by the larger district would have Lompico residents pay for improvements to that area’s pipes and tanks at a total cost of about $2.64 million. Lompico voters would have to pass a bond to pay for the work, but after the merger, SLV would take over management and repairs, essentially dissolving the smaller district.
Improvements by way of that bond would include replacement of two leaky 100,000-gallon tanks and four aging 60,000-gallon tanks and the installation of an 8-inch water main that would connect Lompico to the rest of the San Lorenzo Valley Water District.
Lompico approached the San Lorenzo Valley district in April about the possibility of a merger that could help it balance its books, manage its system and replace the tanks while keeping rates reasonable.
According to the district’s records, the average Lompico customer uses 6,800 gallons of water during each two-month billing period at a cost of $118.78. If the district were to merge with SLV, the cost for 6,800 gallons would drop to $64.48. However, Lompico residents would also pay back the bond for infrastructure work with a likely property tax increase of $450 to $475 each year for 20 years, according to an analyst hired by SLV.
No timeline has been suggested, but a merger of the two districts would likely take between nine months and two years to complete, according to SLVWD board member Jim Rapoza.
“It’s no different than a next-door neighbor who’s in trouble,” Rapoza said. “There is an economy of scale that applies to any annexation. The SLV Water District is in this for the long haul. It spreads the base costs over a bigger group of people.”
The cost of merging with Lompico would not change water rates for the rest of the valley, and Lompico residents would pay the same rates as others in the valley, Mueller said
Reasons why
The past year has been tumultuous for Lompico Water. Board member Jane Wyckoff left the board in February for health reasons. Shortly after, the district secretary was fired for embezzlement and arrested, and longtime general manager Mike Eggleston was fired in April, with no reason given.
Eggleston claims the district owes him more than $140,000 in unused vacation pay he accrued during his more than 20 years with the district.
Henry, the board president, has been running the district with a temporary secretary and said the district has been able to pay its bills without the cost of a full-time manager but has not been able to save anything extra.
Without a full-time manager or bookkeeper, Lompico has turned its bookkeeping over to Mary Joe Walker, the county auditor-controller, and has set up an account with the county to help pay its bills.
“I’m tired of working on it,” Walker said at the July 8 meeting. “The district is in serious, serious financial trouble — the worst in the county by far.”
Walker said she has allowed the district to spend in the red for the past several months, but she can’t do that forever.
Lompico board member Chris Kilgus presented what he saw as the pros and cons of a merger, with the advantages considerably outweighing the drawbacks in his opinion.
“I think the grand jury’s conclusions should be considered,” Kilgus said.
He noted that Lompico’s wells are running at capacity, and SLV would offer another source of water. He also said that the cost of hiring a district manager is too high for Lompico to cover without raising rates substantially.
He also said SLV has a worker on call 24/7 who would not have to be paid overtime, as Lompico must do for its employees when there is an emergency at night. He added that SLV has equipment to which Lompico has no access.
Kilgus said the only flaw he sees is the loss of local control. Lompico would no longer have its own board of directors, though Lompico residents could run for seats on the five-member board that governs San Lorenzo Valley Water District. The district serves much of Boulder Creek, Ben Lomond and Felton.
Recent revelations in the Santa Cruz County Civil Grand Jury report detail many of the problems Lompico faces, and the grand jury has recommended that Lompico merge with the larger water district.
The full report can be read and downloaded online from www.co.santa-cruz.ca.us/grandjury/.
AT A GLANCE
WHAT: Lompico County Water District meeting
WHEN: 7 p.m. Tuesday, July 20
WHERE: District headquarters, 11255 Lompico Road, in Felton.
