A backlog of debt has led the Tomales Village Community Services District to propose its first sewer rate increase in 11 years.
The special district, which operates and manages both the town’s community park and a wastewater treatment plant for nearly 100 customers, is proposing to tack on an extra $9.45 per month to bills beginning this July; an additional $9.45 would be implemented in 2018.
The district says it must pay nearly $300,000 over the next nine years for debts resulting from sewer plant improvements. Solar bonds obtained in 2009 helped fund the installation of solar panels at the treatment plant and irrigation field, and two loans from the State Water Resources Control Board assisted further improvements in 2010.
The district has previously used cash reserves to pay off those debts, but the current board speculates its $245,000 in cash reserves will be depleted in three years if it does not find other sources of revenue.
Although a general rate increase hasn’t been approved since 2006, a special 15-year rate increase of $5 per month was approved in 2009. The proceeds went into a restricted fund to help pay the lease on the solar panels.
The increase would not fund operations, maintenance or capital improvements, as the district has projected a balanced budget for those for the next decade.
A special meeting to discuss the rate hike will be held on April 25 at the Tomales Town Hall, when customers can ask questions and give feedback to the board. A public hearing and board vote on the increase will be held on June 14, but first customers must indicate enough support for the hike.
This week, the board sent a mailer notifying all ratepayers of the proposal and inviting them to respond within 45 days if they choose to object. Each written protest will be counted as a nay, while each no-response will be viewed as a vote in favor. A 51 percent majority approval is required.
The district’s debt was assessed earlier this year as part of a 10-year financial plan. It was the district’s first long-term financial plan since it formed in 1999, and the board got help from the Rural Community Assistance Corporation in the effort.
Donna Clavaud, the district’s vice president, said the district’s previous administration, headed by general manager Karl Drexel, had not devised a forward-looking budget, but instead used comparison budgeting that referred to past income and expense reports for future planning.
“They weren’t doing any long-range financial planning,” Ms. Clavaud said. “With all due respect, they were looking very short-term, and had looked backwards when developing the budget.” And, she said, “There was no strategy to pay the debts except to use cash reserves.”
The district’s income is limited. Most is generated through service charges, which are projected to reap over $177,000 next year. Shoreline Unified School District, which uses about a third of the district’s services, provides over $70,000 a year.
Annual sewer services for residents currently cost about $756 a year.
But the district is small, and has only had four new customers, who pay a $10,000 fee to connect to the system, since 2000. According to the mailer that went out this week, the past administration had anticipated funds from a proposed development that would have brought more than two dozen new homes, but the plan never came to fruition. And for five years, P.G.&E. issued a yearly $15,000 rebate for the solar bonds, but the program recently ended.
Ms. Clavaud said the board looked at all potential ways to reduce costs before suggesting the rate increase. In 2015, it split the role of the general manager into three part-time contract positions, which cut expenses by nearly $30,000.
Mr. Drexel, who also oversaw secretarial and financial duties, drew a yearly salary of about $91,000. Jose Ortiz, the district’s new general manager, now earns $45,550 a year, while financial manager Melinda Bell earns $10,220 and secretary Cynthia Hammond earns $6,856.
“We’ve cut every line item, from office supplies to legal fees—you name it,” Ms. Clavaud said. “We have created a really modest budget because we’re tiny.”
The breakup of administrative and secretarial roles also improved the district’s accountability, according to board member Bill Bonini. During a board meeting last week, he said splitting the position had increased checks and balances for the district.
In the past, Ms. Clavaud said, “there was not a lot of transparency. You shouldn’t have the same person doing the books, taking notes and managing the overall district. Last year’s accomplishments were developing a policy manual and restricting our staffing by creating contract positions. We’ve come a long way and [the rate increase] is a major piece in increasing the district’s sustainability.”