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Foresthill Public Utility District may close

Budget deficit, Measure B put water provider in the red
By: Sara Seyydin Journal Staff Writer
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The Foresthill Public Utility District will have to shutdown if water rates aren’t raised or a community advisory committee can’t find solutions to the district’s budget deficits. District officials say the district has posted losses of hundreds of thousands of dollars over each of the past several years and reserve funds are almost depleted. Residents say despite the current situation, they want to do what they can to keep their local water provider open. Foresthill Public Utility District general manager Leo Havener said he didn’t realize until he took over Sept. 15 what a desperate financial situation the district was in. He said the current crisis could have been averted years ago by the district’s former administrators and board members. “I knew the district had some challenges, but I had no idea they were this bad. I don’t really know a lot of the history. I sense that people knew things were bad, but weren’t aware of how bad things were. It never had to get here. There was plenty of opportunity to right the ship long ago.” The district lost $224,515 in operations in 2010, according to Havener. The losses in 2009 weighed in at a record $273,039. When the district increased water rates in 2010 to balance the losses, Havener said residents voted down the raised rates later that year. Reserves dried up In 2003, the district took on $3 million of debt to purchase its water source, the Sugar Pine Dam and water treatment plant, but didn’t raise rates to account for the debt, according to Havener. To make up for the losses, Havener said the district burned through $500,000 to $1 million in reserves. Only $7,811 remains in the reserve fund now, he said. The district held a public meeting on Dec. 14 to inform residents about their risk of losing their local water district. Havener said if another agency took over, residents could end up paying double or triple their current rates. “Who would take over is unknown and what conditions would be placed on the residents would be unknown,” Havener said. “They could pay double, maybe even triple. I would say the overall turnout is the public wants to keep their public utilities in place, but they also want to really know what is going on.” If the current administration can save the district, Havener said it will be with transparency and the involvement of the entire community. “Let’s face it — the history here is not good. There is a level of distrust. This board has been open and transparent. We are going to open up the books, take them on tours, show maintenance facilities and show them what it’s going to take to keep the agency in play.” Rates a divisive issue Brett Grant, Foresthill Public Utility District board director, is the only board member who was re-elected this year. Grant said the board may have made some mistakes in the past, but some of those were made worse by the economy. He said the public grew frustrated when the district raised rates, but stopped pay freezes on district staff salaries and benefits. Havener makes $95,000 a year plus benefits, while the former administrator made about $115,000 plus benefits, according to Grant. He said those salaries were commiserate with pay for general managers of similar sized water districts, including Colfax and Georgetown. “What I heard from the public was we’re willing to sacrifice to keep this, but you took that trust and abused it by not being conservative on your end,” Grant said. The purchase of Sugar Pine Dam was intended to bring the rates under local control, Grant said. The board believed it would be able to renegotiate a lower rate than it was able to from the Federal Bureau of Reclamation. To move forward, Grant said he believes residents need to overturn Measure B, an initiative that residents voted in to vote down the higher rates. According to Proposition 218 residents have the right to vote down water rate increases. “I would say I am a little optimistic, but in my mind it’s going to take the public over Measure B. If you want to have control over your own water dist that’s what it’s going to take,” Grant said. He said the average increase of $12 a month caused a surprising amount of division. The current rate is a base rate, along with a fee for Sugar Pine Dam and repair and replacement fee adds up to $37.32. $2.24 is charged for any units over what the base covers, which is 0 to 10,000 gallons. How does another agency compare? The Placer County Water Agency charges are based on a seven-tiered system of a base rate and renewal and replacement fee, plus a consumption fee. The average bill for 30 days of service with an average 5/8 sized meter and average consumption rate about $14,960 gallons of water is $54.70, according to Matt Young, Placer County Water Agency Director of Customer Service. Einar Maisch, director of strategic affairs for the Placer County Water Agency, said it is in support of the Foresthill Public Utility District staying open. He said regardless of what happens residents will eventually need to pay what it costs to provide their water. “PCWA is often the sort of last resort service provider. We’ve helped out other districts a number of times. Our focus is the cost of water service is whatever it is,” Maisch said. “Our position has been to support the FPUD board. We think they’ve got a better handle and could provide better local service. They are going to have to pay what it takes to run their own water system one way or another.” Keeping it local Joan Elliot has lived in Foresthill for 24 years and is the general manager of Ore Cart Steakhouse and Red Dirt Saloon in town. She said she hopes the town can keep its local water company. “What’s going on right now is a sad situation that happened over years of time. There is nothing to do to change what was. We just have to do whatever it takes to keep the water now,” Elliot said. “We can’t afford to lose what we have. We’ll be losing Sugar Pine Dam and all or our water rights basically.” Reach Sara Seyydin at saras@goldcountrymedia.com.