MSWD Workshop - January 11

The audio recording of this workshop of the Mission Springs Water District Board of Directors is available here.

Financial Master Plan Update

General Manager Arden Wallum said that the reason for this workshop was to show the board some of the information that would be shared with the citizens' committee that night, and to gather input.

Glenn Reiter said that John Soulliere had suggested saying that it's like MSWD had been playing football, but now the field has changed into a baseball diamond and MSWD had better change into baseball uniforms to stay in the game.

John Soulliere ran down some questions they had gotten from the MSWD 2.0 citizens committee. One had to do with staff compensation. He planned to present the committee with the salary matrix that's on the district's website. He said he would also explain how they got there - the history of the salaries. There had been a question about consolidation, and the answer would include information about the benefits of local control. Another question was about the completion of the sewer project and Brent Gray would be at the committee meeting that night to answer it.

Mr. Reiter said that they have analyzed the practices of the district, going department by department, looking at labor costs. They've inspected facilities and interviewed employees out in the field.

He said the cash fund balance is the most misleading balance of information when looking at any district. There are restricted and unrestricted money.

The sewage treatment facilities are working quite well, but Mr. Reiter asked the question, "How much money do you have set aside in case you lose your blowers or you lose one of your pumps?" There is none. Someday Horton needs to expanded. The Desert Crest waste water treatment plant is very small and inefficient and needs to be consolidated. "And you've got ID-E sitting out there that - the entire system, for a lack of better term, it wouldn't pass any AW standard by a long shot." (ID-E is the Whitewater/Desert Crest area of the district.)

Then the discussion turned to customer service policies. He said MSWD goes way out of its way to do a super good job in customer service. The question is, can the district afford to keep doing that? It's a big part of the budget.

Uniform rates are going away in other districts, to be replaced by rates that more closely reflect the cost of delivering service. Areas where water has to be pumped a greater distance or uphill get higher rates.

Mr. Reiter said the district expends a lot of effort before it shuts off someone's water.

The district sends personnel daily to visit every well and pump. If there were more back up facilities, it might not be so critical to send an employee every day. Or, if there was more electronic remote monitoring, there could be fewer visits by humans.

Making repairs on 80 to 100 service lines a month distracts from preventive maintenance.

Vice President Brown said that it needs to be made clear to the public that it's the cost of the maintenance of the district's infrastructure that is a big reason behind last year's rate increase - not the bugaboo [my word] of staff compensation. Director Martin said it should be emphasized that the district didn't get to this position through poor management, but because of the changes in the general economy.

The subject moved on to customer service. Mr. Reiter said the district provides very good customer service, but it's expensive and most of the attention goes to only a small percentage of the customers - about 2%. The district handles 10,000 to 12,000 service visits - visits to customer homes or businesses - per year.

Mr. Reiter suggested, as an example, one possibility would be to charge the customer for a requested re-read of the meter, if the district's initial read turned out to be correct. Another example would be charges for broken meters. Another district that is a client of Mr. Reiter charges $1,000 for broken meters.

Some districts charge extra for pumping water up above certain elevations. Half of Mission Springs' water goes through a booster system, which costs money.

They talked about consolidation. Whether it's a small district or merged into a bigger district, the miles of pipeline remain unchanged, the infrastructure still needs to be maintained. Consolidation would mean the elimination of five directors, but that's only a few thousand dollars year, and the real cost is loss of local control. [Consider the Palm Springs Unified School District - how much say does Desert Hot Springs get in the school district? Bupkis.]

Richard Cromwell, who made up a full 50% of the public audience at this meeting, raised his hand to make a comment about something earlier in the discussion. "I think one of the points you're going to have to give the folks, to remain transparent, is what is the status of the lawsuit. I heard today that they are going to appeal it. Those kind of rumors circulate. That's what's on everybody's mind. That's what started all this. I think you have to say where are we, what's the status of the rate suit."

John Soulliere displayed a slide that illustrated one example of the expense of customer service. A customer had a leak on his side of the water meter in a pipe that had been laid 20-some years ago. His bill jumped by $250. The high reading was caught by the district's system. Customer service went out to check the meter and notified the resident of the leak on his side of the meter. The leak was stopped. The customer disputed the bill. The customer service technician and the service supervisor are automatically involved in the dispute resolution. They spent about 2.5 hours working on this. The customer was not satisfied and appealed to the next level, the finance director. He spent another 2.5 hours on it with the account manager. A letter was written to the customer to tell him that a leak on his side of the meter is at his expense. The customer then contacted Congressman Lewis, even though this was far from being a federal issue. Mr. Lewis's office contacted the district's Washington lobbyist, Thane Young, who in turn called district offices. All the data was reviewed. The customer's residence was revisited and a discussion ensued. Another letter was written to the customer affirming the district's position in this.

The customer could then appeal to the public affairs committee. That's at least five hours of the board secretary's time. Agendas must be posted publicly. The hearing before the public affairs committee will involve two directors (and they're the least expensive part), the finance director, the general manager, the board secretary and possibly more.

Beyond that level the customer can then appeal to the full board (another $750 of district expense). Total cost of all administrative expenses for this one item could exceed $3,000.

A discussion ensued as to whether it wouldn't be cheaper to just give him the $250. General Manager Wallum's position is that it is not, because then you encourage everyone to pile on and dispute their bills. [While that is common sense, there is not necessarily an objective study to support that.]

But the point of this item was to get the citizen's committee to discuss what level of customer service would be appropriate.

Suggestions tossed out at this workshop of the board of directors were (1) ignore the Congressman (possibly facetious), (2) get rid of the public affairs committee and go straight to the board, (3) and to eliminate all steps between checking the meter for accuracy and going to a review by the full board of directors.

Vice President Brown suggested that it would be better to use an average example of customer service, rather than this extreme example. He said he could only remember the public affairs committee meeting twice on matters like this. He said it's important for the public to enjoy due process in their disputes with the district. He also said that the presentation included detail that would distract from the overall question which is "how much customer service should the district provide?"

In no case is it legal to simply waive a bill when the district's billing is not in error. It's not like private industry where a business might do something like that in order to maintain good public relations.

Richard Cromwell said the case of a Congressman being involved is extremely rare. In his 20 years of running SunLine he was contacted by government officials only twice. He said if something is the district's fault, then admit it immediately and set out to correct it. If it's not the district's fault, then work with the customer (payments over time, perhaps), but don't give anything away. He said the district would be amazed at how few people actually want to go to court.

Mr. Soulliere estimated the district had spent $10,000 to $12,000 on "the Whitewater guy" and easily more than $5,000 on Caliente Springs.

There was some discussion about the fact that the customers in the Mission Springs Water District are different and have different expectations of customer service, than customers in other parts of the valley. Mr. Brown said he would like to know, if possible, how many DWA customers walked into DWA offices to pay their bill, same for CVWD.

Mr. Reiter said that he has never before seen a water district act so transparently in this process as MSWD. Mr. Bowman suggested the district could use this as PR, saying that this district is leading the way for all others.