The El Dorado Irrigation District began the year with an 11 percent rate hike and ended the year by knocking 6 percentage points off an 11 percent rate hike that had been promised for January 2014.
Rate increases were the top issue as four candidates vied for two open seats on the EID board. Winning election in November were Greg Prada and Dr. Dale Coco.
Taking their seats Dec. 7, the two new board members took different tacks on rates. Prada made a late agenda play for a four-month freeze on rates, but Coco declined to endorse that. Coco was concerned changing the 2014 budget that had been approved in October would put the kibosh on refinancing part of EID’s debt and dropping the district out of its A1/A+ bond rating.
Refinancing $130 million of the district debt at a lower rate would save $300,000 in 2014 and $1 million each year thereafter, said General Manager Jim Abercrombie. Abercrombie said he would have the bond refinancing documents at the Jan. 13, 2014, meeting.
With a 5 percent rate hike already baked into 2015, Coco made clear he would likely be a vote against that.
Director Alan Day had voted against the rate hikes when they were approved in March 2012 after nearly two years of the district struggling to maintain an income-to-debt ratio of 1.25 as required by its bond covenants. That ratio disappeared when the home construction market disappeared in 2009 and EID lost its hookup fee income. To maintain its required debt ratio it resorted to rate hikes, which so far have enabled it to fund capital projects on a pay-as-you-go basis instead of issuing debt.
Part of the two-year process included conducting a Cost of Service study to justify rates in each class and to shift from 25 percent for base charges and 75 percent for commodity to a 50-50 split that made revenue more predictable for the district. As a result of the Cost of Service Study, 2013 began the year by eliminating the Domestic Irrigation category. Those in that category had the option of shifting to the Small Farm rate, which required an inspection by the county Agriculture Department.