CVSSD makes decision on overage fees
The Castle Valley Special Service District met in their January meeting. They elected Brad Giles as chairman for the year and Vernell Rowley as the vice chairman. Kirt Rasmussen is the treasurer and Hilary Gordon the secretary for the board.
Kent Petersen, John Lemon and Kash Winn were present to talk about outside of city water connections and the charges associated with them. Petersen said they heard that the CVSSD could be tripling the rates for overage and that creates a concern for ranchers who water a herd of cows. The costs would be prohibitive. Petersen said CVSSD has not been involved in the construction of Millsite and the stock watering lines which Ferron ranchers put in at that time at their own expense. In 2000, Petersen said he replaced the line to his ranch with a four inch PVC pipe around the time the irrigators were putting in their new lines. Petersen said the CVSSD has been a good thing, the taxes paid by Rocky Mountain Power and mineral lease monies have allowed the district to do numerous improvement projects in the county. "The people who pay taxes to the district live in the city and we recognize that. We want to pay our own way. Let's figure out a rate to the outside water users that's fair. It's not proper to price gouge residents just because they live outside the cities."
Kash Winn said outside city water users are responsible for maintaining their own lines. He recently had to run a new line, changing from a two inch to four inch line and had to pay for it. He said the CVSSD doesn't have anything to do with it as the line is outside the boundaries of the district. He said he understands the people within the district pay taxes and these taxes are used for the service and maintenance of district lines. Winn wondered how the CVSSD incurs costs for outside city water users when they are just running water through their system to get to the outside users. Winn said he hasn't understood why the district is looking at raising rates. "We are willing to pay more, but overages could hurt cattle raisers," said Winn.
"Water users in Ferron are trying to remedy the reliance on culinary water for stock watering by installing stock watering lines, which will be complete in the next two years," added Lemon.
Mistie Christiansen, Emery mayor has talked to the outside city water users in Emery. Consol put in an 8 inch line at their expense and have allowed stock producers to hook onto this line. She feels a huge overage will be harsh for those water users.
Mayor Joanne Behling from Ferron said the majority of her outside water users are in favor of paying their fair share (higher base rate), but the overage fees would hurt them as well as Millsite State Park and the park would have to do away with their grassy areas, if they couldn't afford to maintain them.
Jacob Sharp is the district manager for CVSSD. He said there hasn't been an amount decided upon for any increases. He has done a number of cost comparisons in comparing the taxes those within the district pay and averaging them out to see what the outside water users should pay that would bring their costs in line with what those within the district now pay. Currently the overage charge is $1.40 per 1,000 gallons over the first 10,000 gallons. The base rate is $11 for the first 10,000 currently. In doing the cost comparisons, Sharp determined the base rate for outside city boundaries would be comparable at $30 per month base rate. The overage rate wasn't determined in the cost comparisons.
Mayor Behling said in prior meetings tripling the $1.40 rate was discussed, which would be $4.20. The amount of $2.10 was also talked about.
Rasmussen said it was never the intent of the district to stick it to the county residents with increased fees. The intent was to make fees equitable to all.
Cities purchase water shares to provide water to their residents. The district doesn't own water shares.
Sharp said in looking at the water rates analysis it was determined that $30 would be a fair amount. Then the district would be recovering from outside water users approximately the same amount as what taxes were paid by those within the district boundaries. It is one of the goals of the CVSSD to promote water conservation and they are concerned with excessive users of water. Last month the amount of the overage fees discussed was $2.10 and the district board was instructed to go back to their communities and discuss $2.10.
Those present understood the need for raising the base rate for outside users. They understood the need to conserve water and discourage excessive use. Castle Dale Mayor Peacock said every town has different situations. He said he is very impressed with Ferron in wanting to put in stock watering lines. In their situation they have people who have declined to hook onto stock watering lines because they can use the culinary water and its cheaper, so it creates a dilemma for the city. Their reason for declining was they didn't want to put water shares in for the stock watering lines.
Mayor Behling said the water use in Ferron will go down as soon as their stock watering lines are in place.
Mayor Christiansen said Emery's outside water users have been very helpful. Consol and the canal company are going to step up and help with costs on the new water line system for Emery, but she thinks they wouldn't be as willing to do that if they are hit with large overage fees.
Those wishing to build outside the city are charged a connection fee. In Huntington they need to put up three water shares. In Ferron, they pay a connection fee because the canal company asked Ferron not to buy up any more shares. In Castle Dale, new home builders can lease the shares and the city has an agreement with the Cottonwood Canal Company to that effect.
The ranchers present were asked if they could live with the increase from $11 to $30 per month. They agreed they could live with it.
There were a few matters of business to be taken care of before a motion could be made on the increases to the base rate. The first item of business was changing the intergovernmental agreement to allow outside of city water connections. This change was approved. Documents supporting that this change is a benefit to the citizens of Emery County was submitted along with the intergovernmental agreement change. The amendment to the interlocal agreement between CVSSD and the cities modifies the existing agreement. This allows the CVSSD to provide culinary water outside district boundaries. Each city and town ordinance must be modified to note the change in the interlocal agreement to allow outside of city culinary connections. Someone wanting an outside connection first applies with the city nearest where the connection is needed and the city will bring it to the district board for final approval. It must be approved by the city first. The last document was the new proposed fee schedule.
The fees for new connections hadn't been reviewed for 20 years. Sharp did a cost of materials study for the cost of connections to come up with the new amounts.
Mayor Behling made a motion that the culinary base rate for outside city connections be increased to $30 for the first 10,000 gallons and the overage fee be left at $1.40 per 1,000 gallons after the first 10,000 gallons. Mayor Peacock wanted the wording that the rates would be reviewed every two years and adjustments made as needed. Gerry Hatch, Clawson representative seconded the motion and it was approved.
Sharp said he has also been involved in a sewer analysis and proposed the outside sewer connection monthly fee go from $7 to $22. This increase was approved.
Sharp said the CVSSD will experience cash flow issues for the next couple of years because of the balloon payments due at the end of the bond repayment schedule from the 2001 bond election. The next three years will be the highest payments the district has seen. The January payment has already gone out and March will be the next payment. With the Huntington chip seal project that's due out for bid and award around that time it could create a cash flow problem for the district. A tax anticipation loan may need to be purchased to get the district by until the taxes come into the coffers in December. In the past at times the district has operated on tax anticipation loans.
The chip and seal project for Huntington hasn't been advertised yet.
It was debated whether or not it was wise to wait any longer with the maintenance projects of the city streets. Craig Johansen said the streets are on a nine year rotation for chip seal maintenance. "Is it gonna hurt ya, probably." said Johansen.
Mayor Gordon wondered if by postponing the project a year if the funds would be there next year. Sharp said the district is pretty much in the same shape for the next three years during the time that bond is repaid. Johansen said part of the election for the CVSSD in November 2009 was the rate levy for road maintenance. Johansen didn't think it wise to delay road projects so bond payments could be made when the money is really from two different sources.
Sharp said the money for the road chip seal maintenance project for Huntington is in the budget.
The CVSSD has applied with CIB for a loan and grant package to cover 2010 construction projects. The CIB will meet on Feb. 4 for final approval of this package. On Feb. 9 in commission meeting at 10 a.m. will be a public hearing on the bonds. March 23 is the scheduled bond closing. Johansen and Tuttle will have the city street projects to the district by March 18.
The Huntington chip seal project was discussed again, Mayor Gordon moved to postpone the chip seal. Johansen said, it probably won't make a big difference in chip sealing the new asphalt, but what will catch you is in rejuvenating existing chip seal projects, you will be between 22-24 years between chip seals. "Every year we're getting further behind on road maintenance," said Johansen.
Mayor Peacock said, "Over the long term, you may see a shift in the district more to maintenance and more away from new projects. We need to repair things we already have. I hate to see us falling behind now with maintenance."
Johansen said now is the best time to bid the chip seal project before the contractors get full. It was decided to go ahead and bid the chip seal project for half of Huntington. Sharp will check into the tax anticipation notes and the interest rates charged for these notes.
The board approved the Zions Bank financial contract for the banks help with bonds and structuring loan payments. The contract is good for five years.
A discussion was held on the Elmo secondary water project. The salinity project being undertaken now will eliminate canals along the system. They don't want to maintain a canal just for one pond so they want the district to have a connection to serve the pond. Talks have started on how best to proceed with this and what the costs will be and who will pay for what part of the project.
Gerry Hatch said Clawson is excited to go ahead with the sewer project there. Craig Johansen will attend the next Clawson Town meeting to explain how it will work to the Clawson residents.
In the managers report Sharp said there will be no cost of living increase for personnel this year. Ron Kennedy has retired from the district and the district will promote from within for his position. The entry level employee position has been advertised in the paper. Sharp is seeing to it that employee evaluations are complete. He is meeting with each employee and going over them individually.
Connection fee increases: Water: 3/4 inch culinary- from $600 to $1,000; 1 inch culinary $650 to $1,150; 2 inch culinary from $1,300 to $2,800.
Sewer: typical sewer from $500 to $900. Typical secondary (1.5 inch) from $500 to $1,100; 2 inch secondary $500 to $1,300.
Typical 3/4 inch water, sewer and 1.5 inch secondary from $1,600 to $3,000.
The culinary water base rate for inside the district: $10 for 10,000 gallons; overage $1.40 per 1,000 gallons over 10,000.
Base rate for outside district users will raise from the base rate of $11 to $30 per month for 10,000 gallons; overage will remain the same at $1.40 per 1,000 gallons over 10,000 gallons.
The base rate for sewer service within the district will remain at $7 per month.
The base rate for sewer service outside the district boundary will rise to $22 per month.