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July 8, 2019

MSWD Rate Study - June 24, 2019

Immediately after the roll call, President Duncan had some remarks to make:

Need to make a correction. Not real sure why two members of the public are here, what you're anticipating. Despite what you may have read on the internet, we're not here today to talk about a rate reduction. That is not scheduled. That is not part of our agenda. What we are looking at is we had a water study done in 2015. It was adopted in 2016. We are here on an annual meeting to see if we want to go with the rates that were approved way back then, at the most, at best we'll make no changes at all. So, if you're looking for a rate reduction hearing, it's not going to happen today.

By now it's become obvious that whenever President Duncan has some sort of declaration to make, it means that Director Grasha has somewhere, sometime misled or misinformed the public in his role as Director. So, Director Grasha must have promised a rate reduction, which would have been a promise based on nothing more than some mental fiction he played in his own imagination. Now, why President Duncan thought to direct his remarks at me and the other member of the public in attendance, former Director Jeff Bowman, I really have no idea. I showed up because it was an open, public meeting of the Board of Directors of the Mission Springs Water District, and I don't need any better reason than that. I'm sure that neither Jeff Bowman nor I shape our expectation of board meetings on anything that Mr. Grasha ever says.

General Manager Arden Wallum said the board was to consider whether they should implement the final step of the rate increases that were approved in 2016. A decision is needed now, so that the district knows how much the sewer bills on the tax rolls should be.

Jonathan Barnes from Lighthouse Consulting Services was available via telephone during the meeting. He was involved in the rate study in 2015 and has updated the data for this meeting. The approved water rate increase for 2020 is 9.5%, which would mean an average increase per household (using 13 units of water) will be $3.79/month. The sewer rate increase is 5%, raising the annual rate by $28.68.


Changes Since The 2015 Rate Study

  • The district needs to pay for a new automated meter infrastructure ($6.5 million)
  • New Well 42 needs to be constructed ($3.5 million)
  • Chromium 6 costs have been delayed and will likely be lower than projected
  • Additional staff
  • Sewer plant capital costs have increased
  • Sewer system maintenance has been deferred
  • Administration building ($5.5 million

Director Grasha asked when the board voted for a new administration building. President Duncan said they had not voted on it yet. "So, you're just padding the budget here, aren't you? Five and a half million here, twenty million for chromium six removal that no longer needs to be removed. But we're not going to mention how much that is. For God's sake [unclear] consider the needs of the ratepayers. Have a twenty-five million dollars laid on their doorstep in increased bills and with nothing but word soup to explain it. It's offensive. Go ahead. Sorry. That's what you read on the internet. Something to that effect."

[And this is a good moment to point out that's why you don't believe everything you read on the internet. You can go to the district and get real facts.]

GM Wallum said "That's incorrect."

Mr. Grasha interrupted him, "It's not incorrect. There was twenty million dollars"

Vice President Martin interrupted him, "You said that you would let him respond, so let him respond. Okay?"

GM Wallum: "What we're doing is getting estimates of what that would cost to expand the building. Now you can see we can't stay here."

Mr. Grasha: "I don't have a problem with that. The problem is the board never voted on it. It gets put in the budget because it was a way to hide the reality of these massive increases in billing that you...[mumbles]."

[Here we see that Mr. Grasha has confused a Powerpoint slide created by a consultant with the district's budget. They are two very different and separate things. And I don't see how padding an expense budget would hide rate increases from the public.]


Goals

  • Maintain unrestricted reserves at an amount equal to about six months of operating expenses
  • Fund capital reserves
  • Maintain debt service coverage at 1.5x or greater
  • Fund all operating and capital costs


Future Rate Increases

Mr. Barnes reported that rising expenses are going to require future rate increases. He estimated an increase of 3% in the water rates every year beginning in 2021 and a 4% increase in sewer rates every year, also beginning in 2021 and continuing through 2024 would be needed.


Comparison With Other Districts

Water rates in nearby districts
Rate Survey - Water



Sewer rates in nearby districts
Rate Survey - Sewer



Public Comments

Jeff Bowman said that in 2011 the district was in a dire situation as regards its reserves. If the district had not increased its rates, would it have been able to fight DWA? He encouraged the board to stay the course.

Erica [last name unclear] from the Building Industry Association spoke next to ask if the rates being discussed were for the end user. The answer was yes.

Director Wright said that when the market crashed in 2008, the district lost 25% of its revenue. The current set of rates was intended to catch the district up.

Director Grasha asked a question. "So, we're going to stick to...are we going to collect the twenty million and remove chromium since it's been overdone by the court and the district has shut down all wells that produce chromium?" The reply was that the rules from Sacramento could be changed tomorrow. Mr. Grasha continued, "It's against the law to collect money in this district for what services that are not going to be rendered. That's the whole reason for doing this is only to collect how much money it requires to run the district. We're collecting twenty million dollars off of this last rate increase to remove a toxic carcinogen from the water that we're not going to remove. According to the district, we don't even have it in our water now. But we told everybody in the district that we did when we passed the twenty million dollar increase to make up for that. So the idea that we're going to start lying now or if we were lying then."

Mr. Grasha's been making up stuff again. There was no $20 million rate increase. The district's rates are required to be high enough to cover expenses, but no higher, and that's where they are when predicting a lower expense for chromium mitigation.

Filed under Coachella Valley,Desert Hot Springs | permalink | July 8, 2019 at 03:59 PM | Comments (0)

July 4, 2019

Fireworks in Desert Hot Springs


July 4 2019, Desert Hot Springs.

Filed under Coachella Valley,Desert Hot Springs,Photography | permalink | July 4, 2019 at 11:04 PM | Comments (1)

July 1, 2019

MSWD Board Meetings, June 13 & 17, 2019

This report covers both meetings of the Mission Springs Water District Board of Directors on June 13 and 17, 2019.


Water Standy Assessments

Every year, the board sets these standby assessments. The basic rate for an undeveloped parcel less than an acre which abuts a street or easement where there is a water line is $26.80/year. There are variations for larger pieces of land. The total amount for the district is $240,139 assessed against 4,097 owners of 4,886 undeveloped parcels.

Approved 5-0.


Sewer Standy Assessments

Same concept, but for sewer lines...so fewer parcels are affected. The total for the district is $13,331 affecting 763 owners of 1,124 parcels. The basic rate starts at $10 for a parcel less than acre that abuts a street or easement where there is a sewer line.

Approved 5-0.


Putting Delinquent Accounts On The Tax Rolls

Account balances of greater than $5 that are more than 60 days delinquent are to be transferred to Riverside County tax rolls. The total delinquent amount at this point is $209,851.51.

Approved 5-0.


FY 2019/20 Budget

The budget had been discussed in an earlier board workshop. Approved 4-1, Director Grasha voting against. He did not say why he voted that way.

MSWSD Capital Budget and Continuing Appropriations 2019-2020 (click for a much larger version)
MSWSD Capital Budget and Continuing Appropriations 2019-2020


MSWD Departmental Budgets 2019-2020 (click for a much larger version)
MSWD Departmental Budgets 2019-2020


MSWD Departmental Budgets Comparison FY 2019-2020 and FY 2018-2019 (click for a much larger version)
MSWD Departmental Budgets Comparison FY 2019-2020 and FY 2018-2019


Employee Classification Plan

Here's the employee classification plan for the upcoming fiscal year.

MSWD Proposed Classification Plan 2019-2020 (click for a much larger version)
MSWD Proposed Classification Plan 2019-2020


MSWD Salary Schedule FY 2019-2020 (click for a much larger version)
MSWD Salary Schedule FY 2019-2020

There was no discussion of this at this meeting. When President Duncan called for the votes in favor, there were four "Ayes." When he called for those opposed there was one more "Aye," and that was from Director Grasha who then clarified that he was not late voting in favor, he was voting against the employee classification system. He didn't give any reason for his vote. Approved 4-1.


Contract With TKE Engineering For Sewer Design In Areas H And I

$285,969 is the value of this contract to design sewers for 675 parcels.


Areas H (gold) and I (blue).
2019_06_13-17 MSWD Areas H and I



Approved 5-0.

Consent Agenda

Director Grasha will tell you he has attended many public meetings over many years, and he might be telling the truth, but somehow he has failed to perceive how those meetings are conducted. Here we have an example. President Duncan asked if anyone wanted to pull anything from the consent agenda for discussion. Mr. Grasha, not speaking into his microphone (he often does this) mumbled something. If I crank up the volume really high on my recording I can hear him say "The minutes look like they were written by you." This was directed at President Duncan. He mumbled some more, but I couldn't make it out. Director Wright who sits only two seats away from Mr. Grasha also couldn't hear him and asked him twice to repeat himself. He then rephrased his request to "He asked if there was anything to pull. I said yes, you can pull the minutes so we can have a conversation about the minutes."

With this clarification, the minutes were "pulled," and Mr. Grasha just sat there like a bump on a log, not understanding that since he had asked to have them pulled for discussion, it was now up to him to do whatever discussing he wanted. Finally, he said "I think the chairman is well aware of my concerns. If he doesn't wish to make the changes, he's welcome to leave them." Everybody knows (except Mr. Grasha, it seems) that no Director writes the minutes. If Mr. Grasha thinks a correction is needed, he has to man up and state those corrections clearly in the open, public meeting so that the secretary can hear them so she can then actually make the corrections. Finally, Mr. Grasha decided to wait until the Monday meeting to state whatever corrections were needed.

At the Monday meeting, President Duncan asked Director Grasha if he still wanted to pull the minutes for discussion. Again, Mr. Grasha mumbled his reply and avoided speaking into the microphone, but this is what I could make out:

There was some statements in there in the minutes that didn't seem appropriate for...that I...just want to enter my objection to the comments you had made in there and they were word for word in the minutes as if you were somehow [unclear].

At this point, President Duncan had the board vote on the remainder of the consent agenda (approved 5-0) and then turned back to Mr. Grasha so he could state his concerns with the minutes.

I just think when you're making personal attacks that when they appear in the minutes as if the Director [unclear] I don't understand how they are repeated in the minutes word for word, but the person that's being attacked his comments are not registered at all...

So, he seems to be objecting to the fact that the final remarks by President Duncan at the May 2019 board meeting were included in the minutes, but that his own comments which were not uttered in the meeting are missing from the minutes. He doesn't seem to understand what the minutes represent. And probably due to that misunderstanding, he doesn't know how to counter President Duncan's remarks. All Mr. Grasha would have to do is read out his own comment, just like President Duncan did. The most appropriate time to do it would be during the Director's Comments on the agenda. His comments would be even more effective if he speaks up and into the microphone.

The attorney stepped in at this point to say "The board member is just noting his objection for the record."

The minutes were approved 4-1 with Director Grasha voting against. The attorney pointed out that it was Director Grasha who had voted against, whereupon Mr. Grasha gave him one of his looks, so the attorney clarified for the benefit of Mr. Grasha that the law requires them to audibly identify who voted for and against the item whenever a vote is not unanimous. This, apparently, was news to Mr. Grasha, although he tells us he goes to lots of these public meetings.


Director Comments

Director Grasha objected to the district having a relationship with the legal firm of Brownstein Hyatt Farber Schreck because, he said, they own 500,000 shares of stock in the Cadiz water project. Later, Mr. Grasha asked for a future agenda item to discuss the contract with Brownstein Hyatt Farber Schreck. President Duncan said it would be done. I don't believe the MSWD Board of Directors has ever taken an official position on the Cadiz project.


Future Meeting

General Manager Arden Wallum polled the Directors to find a date when they would all be available for a "workshop on these rates." "A rate study," he clarified. They settled on Monday, June 24.

Filed under Coachella Valley,Desert Hot Springs | permalink | July 1, 2019 at 07:21 PM | Comments (0)