Ron's Log

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July 8, 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



Sewer rates in nearby districts



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

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