The “worst case” budget scenario for Community Services District customers calls for an average 5.4 percent bill increase, $9.54 a month, for those behind the gates. In the Village, the maximum increase is 5.5 percent and $7.45. These numbers assume, on average, that you will cut water use by 6.5 percent. If you don’t, your bill will go up even more.
The CSD board can reduce those increases before taking final action on the budget in June, but it can’t take them any higher. The changes will land in July’s bills. The CSD handles community water, sewer, drainage, security and waste pickup.
In a presentation on the $6.9 million budget at a special board meeting Thursday, Tom Hennig, director of administration, offered a long list of reasons for the increase. Among them:
- Higher CalPERS retirement and unfunded liability costs
- SMUD rates increasing 4.75 percent
- Professional costs for the community’s upcoming application to extend its water rights
- An increase in liability and workers comp costs
According to the presentation, the budget allows 2.75 percent for wage increases for represented employees and a $45,000 pay-for-performance pool for the unrepresented workers. It projects a 10 percent increase in medical premiums. It also reflects the possibility of retirements and new hires coming in at lower salaries.
Mark Martin, the general manager, said 80 percent of the budget increase is out of the CSD’s hands because the spending involved isn’t discretionary.
At this month’s board meeting, Hennig said CSD rate increases over the last 10 or 15 years have averaged 2.48 percent. “The fact of the matter is, rates are going up all over the place,” he said Thursday.
Hennig said the budget is built on the assumption that the average property will use 1,426 cubic feet of water per month.
In an interview Friday, Martin said household water consumption for the last five years averaged 1,526 cubic feet per month, which is 6.5 percent more than the 1,426 used in the budget calculation.
If a household behind the gates uses the 1,526 cubic feet the community has averaged, and not the 1,426 budgeted, that household’s CSD bill next year will go up $2.07 beyond the $9.54 increase, Martin said; in the Village, this differential will cost a homeowner 52 cents more, on top of the $7.45.
At Thursday’s meeting, Martin said the budget reflects the reality that the community must reduce its water consumption. He said CSD will engage in “much more strident” education about the need for this change.
Under a state law signed last year by Gov. Jerry Brown, indoor water usage in the state will be limited to 55 gallons per person per day in 2022. The CSD’s five-year average of 1,526 cubic feet works out to about 380 gallons per household per day, but that includes both interior and exterior usage and it doesn’t figure in the number of consumers per household.
Among the budgetary topics discussed Thursday:
- Director John Merchant continued his push to increase the district’s reserves funding. Given that reserves funding isn’t budgeted to increase, he asked that any excess revenue at year end go to reserves.
- Directors talked about how to fund Security given its smothering funding limitation – a 2 percent increase in any year – and the finding that Murietans don’t want to pay more for Security.
- The board briefly discussed how to push water conservation, whether through tiered rates, odd-even irrigation programs or positive incentives for savers.
In order to approve a budget in time for the July 1 start of the fiscal year, notices will be mailed to the community on Monday, according to the district budget schedule. That allows 45 days in advance of a public hearing on the budget in May, followed by final board action in June.
Hennig said this year’s budget process has been troubled by the introduction of inaccurate data into the CSD’s financial systems in the last year. “Our fiscal controls are in place,” he said, referring to management of dollars. “It’s just a matter of people putting information in the general ledger accurately and consistently and making transfers from one fund to the other correctly, and we have just lost confidence in that having taken place correctly.”
Hennig said he believes the issue goes back at least to the start of the current fiscal year. CSD lost its full-time controller in December and a temporary controller this week. He said the CSD has requested bids for an accounting or consulting firm to help clean up the problem, and he would like the consultant to start July 1 and look at how the CSD closes the books each month, to check all entries, make any corrections, and guide the CSD on how to proceed with its accounting software.
Hennig said he expects CSD will release its commercial rates on Monday.