Board members of the El Dorado Irrigation District considered lowering next year’s water rate increase from 11 to 5 percent at Tuesday’s meeting.
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Discussed during a midcycle budget workshop, EID originally planned to increase treated water rates by 11 percent in 2014, this on top of the 11 percent increase this year.
Instead, staff proposed increasing the rate for treated water by only 5 percent, the same rate increase planned for wastewater and recycled water.
Staff explained their recommendation by noting the economy appeared to be recovering somewhat based on increases in revenue from new hookup fees. In addition, 2013 revenues are expected to be about $1 million higher than originally budgeted, while projected 2013 year-end expenditures are expected to be lower by $575,000.
Some of those savings came from the early implementation of the Public Employees Pension Reform Act, which the employees of the district agreed to four years early. In addition there was a delay and reduction in the amount of the forecasted bond sale for specific long-lived capital assets along with other cost-saving measures.
Rate increases have become something of a lightening rod for the district, resulting in criticism from the public as well as candidates running to fill two positions on the EID board.
Two of those candidates, Greg Prada and Jake Flesher, were at the board meeting.
Flesher asked the board to consider other scenarios, including no rate increase next year. Prada suggested the board put off any decision until the new board members are installed.
Director Alan Day asked staff to come to the next meeting with scenarios based on a zero rate increase or increases of less than 5 percent. He also wanted staff to outline the potential repercussions of different rate scenarios.
However, General Manager Jim Abercrombie suggested that a rate increase below 5 percent could impact their debt service coverage in the future and lead to double-digit rate increases later.
Also discussed during the budget presentation was the proposed refinancing of some of EID’s debt as well as the prepayment of some of its debt.
With the budget workshop an information item only, the decision regarding changes to the proposed water rate increase will take place at the board’s next meeting on Oct. 28.
Contact Dawn Hodson at 530-344-5071 or firstname.lastname@example.org. Follow @DHodsonMtDemo on Twitter.