Residents will be receiving notices of tiered pricing rates the Rancho Murieta Community Services District may have to implement as part of its drought response. The CSD board voted to start the rate process at its meeting last week. The earliest the rates could be put in place is May if the board decides they are needed to reach water conservation goals.
In response to the drought, the CSD has issued a Stage 2 water warning with mandatory water use restrictions that took effect Feb. 1. The CSD goal is to reduce water consumption 20 percent, and usage was down 7 percent from January during the first two weeks of February, Assistant General Manager Darlene Gillum said at last week’s meeting. Average water usage per connection was 353 gallons per day in January, according to Director of Field Operations Paul Siebensohn’s monthly report.
In the CSD water shortage contingency plan, a Stage 2 drought declaration calls for up to 25 percent conservation and the implementation of tiered pricing and drought surcharges.
The CSD estimates the fiscal impact of a full year of Stage 2 drought to be $394,000. That includes the revenue loss from a 20 percent reduction in water usage, increased power costs for running larger pumps, a power demand surcharge and conservation related spending.
The CSD was able to begin pumping water from the Cosumnes River this month with the larger pumps, and reservoirs are 77 percent full, up from about 60 percent, Siebensohn said.
But 2013 was the driest year on record for the district, with only 6.16 inches of rain, and long-term forecasting is for “a persistent extreme drought,” he noted in his monthly report.
Gillum told the directors that notifying residents about rates for different stages of drought and levels of water conservation wouldn’t commit the board to adopt tiered pricing. However, “in the event we had to move from a Stage 2 to a Stage 3, the pricing would already have been through the Prop. 218 notice and we wouldn’t have to wait another two months to implement it,” Gillam said. “The process tonight, if you decide to authorize the Prop. 218 notices to go out, doesn’t commit the district to implementing this tiered pricing. It’s just getting it out there to the public to get their notice and have 45 days to protest the tiered pricing.” The rates would come back to the board in April, and for adoption in May, “if that’s what you chose to do,” Gillum said. “Tonight we’re not asking for the authorization to implement tiered pricing. We’re just asking to move forward with the 218 process so that it’s in place when the board would like to implement.”
Referring to charts in the board packet, Gillum said that under Stage 2 pricing, the monthly bill for a household that uses the first tier’s 800 cubic feet of water would increase $3.18. The second tier, 1,500 cubic feet, has an increase of $10.84. For 2,500 cubic feet, the increase is $21.79.
If adopted, tiered pricing would stay in effect for the duration of the drought stage, with tiered rates for both commercial and residential customers.
“Tiered pricing is meant to send a pricing signal to encourage residents to conserve,” General Manager Ed Crouse said. “So if they have voluntarily conserved 20 percent and the indication is they’re going to continue throughout the summer, the board has the discretion of either adopting it or not adopting it, and then stopping the tiered rate whenever they feel comfortable that our targets have been met.”
“We’ll continue to monitor conservation reductions between now and May,” Gillum said to the directors. “You may decide that you don’t need to go through with the tiered pricing. But tonight we need to go ahead so that it’s in place in case you do need to adopt it.”
If the board decides conservation goals are being met and tiered pricing isn’t needed, it could decide to absorb the additional costs of the drought, Gillum said.
The board heard opposition to the potential rate increases from developer John Sullivan, who said he was representing commercial interests, and homeowner Adam Dubey, who said he had a problem with the residential pricing structure because it didn’t take into account house and lot size. Referencing his water bills for the past three years, Dubey said,“I was averaging for the July, August and September months 5,088 cubic feet of water (monthly use) and you’re telling me that over 2,500 cubic feet I’m a water waster?”
The directors, with the exception of Mike Martel, approved sending residents notification about the proposed rates to start the process.
In another water-related action, the board approved a $135,500 proposal from Dunn Environmental Inc. for production well construction plans and specifications for wells to augment the community’s water supply by 600 acre feet per year. The funds come from augmentation fees the CSD has collected from developers since 1992. The CSD has also received a grant from the state for well construction.
CSD North Gate contribution
Unlike last week's Rancho Murieta Association meeting agenda, the agenda for the CSD board meeting did not have a board action item for North Gate funding, and President Jerry Pasek said the expectation that the CSD board would vote on approving $115,000 in funding for the North Gate was in error. “CSD is not contributing $115,000 to (the RMA) general building fund. We’re putting in security equipment that’s probably worth that or more,” Pasek said.
When the RMA board voted last week to contribute $115,000, RMA General Manager Greg Vorster listed four funding sources for the project -- $1.4 million from the Pension Trust Fund for Operating Engineers under the terms of a development agreement between the RMA and the PTF, RMA and CSD contributions of $115,000 each, and $360,000 pledged by the investor group that purchased the PTF property.
The RMA initially asked the CSD to contribute $200,000 to the project to cover security-related items. The RMA owns the North Gate and the CSD provides the security operation. Information about the gate project was provided at a town hall meeting Thursday.
2013 Security report
Security Chief Greg Remson presented the annual review of security operations. The report states that the mission of the Security Department is “to protect life and property and also provide prompt, courteous and professional service to the public within the Rancho Murieta Community Services District.” Staffing consists of gate officers and patrol officers.
The report covers non-resident traffic at the gates, patrol time by area (Rancho Murieta Association accounts for the largest share, 72 percent), the most common calls for service, crime complaints, vehicle related calls, and animal calls (loose/off leash dogs top the list with 341 calls; there were also 50 snake calls and nine for mountain lions).
The report is available here.
Water treatment plant update
The board proceeded with plans to build a new water treatment plant. The new facility will be constructed in the footprint of one of the two existing phases of the plant. It will have an initial treatment capacity of about 3.5 million gallons of water daily, which could be expanded to 6 million gallons a day. Bids for the project were scheduled to be opened Friday, and construction is expected to be completed in May 2015.
At Wednesday’s board meeting, after a hearing was held on the mitigated negative declaration prepared for the project in compliance with the California Environmental Quality Act, the board adopted it and approved the project.
The board postponed approval of a consultant’s proposal for engineering services during construction and directed staff to negotiate a reduction from the current cost of about $300,000.
The board approved a reimbursement resolution that gives the CSD time to evaluate “whether internal reserve borrowing or obtaining a private placement (bank loan) is the best option for the financing of the district’s share” of the water treatment plant, Assistant General Manager Darlene Gillum wrote last month in a memorandum on financing alternatives.
The resolution passed last week allows the CSD to repay itself for expenditures for the plant by issuing tax exempt securities, but it does not commit the CSD to issue the securities, Gillum said.
The CSD assumed the lead in building the plant and has been working with development entities to fund its construction.
To date, costs for the project have been paid by the CSD from reserves and from a letter of credit posted by the South developer. The CSD is looking into using its reserves to pay its cost share of $3 million.
Airport’s water, sewer issues
General Manager Ed Crouse said Rancho Murieta Airport will be installing a master meter to monitor water use, and CSD staff has determined a cost for “unaccounted water and sewer” usage that came to light after the airport submitted plans for a hangar project to the county. The water charge is based on three years’ use for a garden and the additional sewer connection charge is “based on one EDU per month,” Crouse said. “That works out to about $1,700 in total.” The sewer charge is related to the RV storage added to the facility about three years ago, he said.
The CSD intended to assess penalties for the unauthorized sewer use, but the only option was misdemeanor prosecution that would have to be carried out by the district attorney’s office, CSD legal counsel Jon Hobbs explained. “I think it’s unlikely they would do it, given the case load that they have,” he said.
“There has to be a penalty for not following our process,” Director Mike Martel said.
Crouse said the district sent a letter to the airport owner and the owner has agreed to install the meter and to other terms. At the present time, the district has administrative penalties and fines applicable on the water side, but not the sewer side. “So what we’re going to have to do is go back and reevaluate our penalty process and figure out what’s an appropriate penalty,” Crouse said.
Crouse said staff is working with Hobbs on a final letter that will notify the airport owner of the water and sewer charges and give him “the opportunity to pay them.”