A. Current Budget Expenditure
The Districts have had a “defacto” on-call policy where a District staff member is expected to be on-call to respond to emergency alarms and other after-hours issues. However, the Districts did not compensate the staff for time spent on call.
The District has now formalized an on-call policy and will compensate employees for previous time spent in on-call status to be consistent with that policy.
- The current District Manager will be paid $41,471.47 plus appropriate PERS contributions for on-call time for the previous 7 years he was employed as the District Operator.
- The current District Operator will be paid $1,148.13 plus appropriate PERS contributions for on-call time from his start date last May through the present.
B. Upcoming Budget Questions
The 2 questions outlined below are likely to be primary discussion topics of the Budget Committee and the District Board over the next several months. If you have a perspective and are comfortable sharing it, please reply to this post, or send an email to ourarchcapeforest@gmail.com, or talk with / email a Board member.
1. Given the work required of the District, how much of it can the District afford to do?
Working in conjunction with the District’s Engineer, the District Manager has identified a set of very high priority projects that must be done in the next 12 month along with a set of other projects of high priority. <<click here>> The estimated resource levels are in addition to those required to do the operations and business function of the Water District.
As the Budget committee considers the District Manager’s recommendations, they will need to decide which projects to undertake and how much money to budget for the labor resources and project expenses that are required to do them.
2. Will Rates and/or Excess Usage fees need to be increased and by how much?
Background:
The District is “a water conservation district which encourages customers to use water sparingly”. To implement this policy, a fixed Rate is charged to every property with a water hook-up based upon “conservation usage” of 5,000 gallons / month or less. “Excess usage” fees are charged, at a tiered pricing, to properties for use of more than 5,000 gallons / month.
Rates have been reviewed annually and have increased 18% since 2011. “Excess usage” fees haven’t been reviewed or increased in 14 years, since 2011.
Facts: (Based on past 12 months of data from the District’s metering / billing system for 293 properties that used more than 1000 gallons total)
Properties with “excess usage” pay less for their water than those with “conservation usage” (Less than 5000 gallons per month)
a. The price per gallon of water for “excess usage” is less than that for “conservation usage”.
If 4,999 gallons are used in a month (conservation usage), the rate-based charge amount is 1.1 cents for each gallon. The price per gallon increases for properties that use less than that amount.
If 5,000 excess gallons are used in a month, the charge amount for those gallons is .45 cents / gallon.
If 10,000 excess gallons are used in a month, the charge amount for those gallons is .78 cents / gallon.
b. “Excess usage” accounts for 17% of water use, but only 12% of water revenue.
c. 157 properties with “conservation usage” pay, on average, 15 cents per gallon of water. (If the 12 properties that have used less than 1,000 gallons total are included, the average price increases to 63 cents per gallon.)
136 properties with “excess usage” pay, on average, 3 cents per gallon for all of their water, above and below the 5,000 gallon level
“Excess Usage” has become the norm. 136 / 293 properties have exceeded the 5,000 gallons per month level at least once and 45 of them do so regularly (3 – 12 times). 20 properties used 20% of the water produced by the District.
Policy Options:
The following are policy options that could be considered for paying for the operating costs of the Water District utility.
1. Use More-Pay Less (than rates): Keep the “excess usage” fees as they are today and raise rates when / as needed. In this option, the difference between excess usage pricing and average rate-based pricing would continue to grow as rates go up. If / as additional monies are needed in the upcoming budget, increase rates and keep “excess usage” fees the same.
2. Use More – Pay Even (with rates): Increase the amount of the “excess usage” fees so that the price / gallon is more evenly aligned with average price / gallon that is paid within the rate structure. In this option, the more-even alignment between excess usage pricing and average rate-based pricing would remain about same whether rates go up or down. If / as additional monies are needed in the upcoming budget, first increase “excess usage” pricing to be in more-even alignment with the current average rate-based pricing. Then, if necessary, increase the rates and the excess usage fees in a manner that maintains the more-even pricing alignment between the two.
3. Use More – Pay More (than rates): Increase the amount of the “excess usage” fees so that the price / gallon is higher than the average price / gallon that is paid within the rate structure, establishing a “fixed higher” relationship between the two. In this option, the “fixed-higher” relationship between excess usage pricing and the average rate-based pricing would remain about same whether rates go up or down. If / as additional monies are needed in the upcoming budget, first increase “excess usage” fees using the “fixed-higher” relationship with the average current rate-based fees. Then, if necessary, increase the rates and the excess usage fees in a manner that maintains the “fixed-higher” relationship between the two.
C. Paying for ongoing operations of the Forest-Watershed from 2024-2035
The long-range plan for operating the Forest-Watershed has a 50-year cycle horizon. Based upon input from Arch Cape Community Forums, that 50-year plan has been divided into 10-12 year segments. The annualized costs for operating the Forest-Watershed during the period from 2024 – 2035 are estimated at $44,000 (not including inflation). Rate increase, tax levy or logging are the alternatives for paying for these costs.
Work has been underway to determine if there is a less costly approach for operating the Forest-Watershed that will not increase the risk to the quality or quantity of source water. Consensus has emerged from forestry subject matter experts that live in our community that a key determinant of clean source water are well maintained roads, including the vegetation along them, that don’t impede or alter the appropriate flow of rainwater. Forestry expertise is also essential to identify emerging issues with the roads and to oversee maintenance work as well as to monitor forest health. Road maintenance and a consulting forester are the lion’s share of the projected costs of operating the Forest-Watershed. The least viably managed path is the one in the long range plan.
The next step will be to put in place a decision making process for the community to determine if the costs of operating the Forest-Watershed will be paid by rate increases, a tax levy or logging.
A.C. Water District Board (Go to Home Page) 
2 responses to “March 21: Preview of Budget Topics & Financial Implications”
i think a conservative policy in lieu of the effects of climate change and water supply makes the most sense going forward. I think everyone wants to have enough water.
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those users using a larger amount than a normal amount for their property should pay more for the overuse. in a determined advancing rate. only fair way to charge. or charge a simple rate for whatever you use over the basic meter charge. that is truly the fair rate.
as far as the forest it costs virtually nothing to leave it as is. and it responds as nature wants it too.
trying to make money off a forest without clear cutting and ruining it for centuries is not a viable way. the forest company makes the bulk of the money and leaves the cleanup and maintenance to the owner which will be more over time than the immediate benefit of any logging.
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