Recognizing the need to evaluate current rate structure and community relationships, a Community Advisory Committee (CAC) was formed to offer community perspective on these important issues to the Foresthill Public Utility District (herein referred to as the District or FPUD). The committee is made up of five individuals from the community.
These individuals represent a wide spectrum of community interests, including residential, small business, retirees, and active members of several civic organizations.
These individuals have been residents of the community between 10 and 58 years, some are District rate payers, others are not; in addition to being residents, most have worked in the community as well, all have taken the task seriously and endeavor to present the most inclusive, thoughtful recommendations possible, within the provided timeline. The unique perspectives of this group helped shape the recommendations that we anticipate will assist in how to best meet the need for District financial stability.
Our recommendations are intended to create a rate structure establishing resilience to changing circumstances and easy to understand, equitable rates, while continuing to provide the District with the needed revenues for the provided cost of service, operations, capital projects, maintenance, and adequate reserves. Additionally, as the Committee has gathered community input somewhat outside of the scope of our appointment, we are compelled to include that information in our report as well.
The committee worked throughout the month and met five times between October 1, 2019 and October 30, 2019, completing a process that consisted of an analysis of the existing rate structure, review of cost of service, anticipated capital improvement projects, evaluation of rate structure options and overview of Proposition 218, solicitation of public input, and meetings with District personnel and rate study consultants, HF&H Consultants, LLC. During our analysis, we developed a rate structures spreadsheet in order to evaluate model variables and impact on rates by input of various rate scenarios. We were able to immediately see the result of those options on the overall rate structure, with District expense and revenue in mind.
The committee members considered the impacts of the various scenarios on all rate payers, with concern for residences, businesses, low-income, and the general relationship of the community with the District.
We have deliberately calculated a proposed rate structure intended to stimulate stability, efficiency, transparency and adherence to the governing laws. After thoughtful discussion and vigilant consideration, we have developed the following recommendations.
FPUD Community Advisory Committee Recommendations:
The committee spent considerable time evaluating rate model variables, options, and the impact each had on water rates and revenue. We reviewed these methodologies with cognizance to equal distribution and impact across all water users in the District, and with a keen eye to what we understand the legal issues to be. We are determined to mitigate further litigation.
The committee strongly believes an 80/20 fixed ratio revenue variable is optimum to sustain the District’s revenue stream. We favor this ratio over the 60/40 recommended by HF&H because we believe it offers superior revenue stability during unpredictable circumstances (i.e. state mandated water conservation, exceptionally wet winters when outside watering is reduced, etc.).
During public input, there was an overwhelming concern regarding inequality in the practice of billing for non-physical meters (commonly referred to as phantom meters). The practice of billing for non-physical meters was among the top concerns of the committee as well. It is well known the rancor that has developed over this controversial topic. The CAC is united with the community and very stalwartly recommends, and equitable billing practices demand, the District charge only for physical meters.
The committee is adamant in our belief it is in the District’s and the rate payers’ best interest to avoid exposure to any additional litigation. Attorney fees and court costs put an undue and unwelcome burden on the District and hence on rate payers. For this reason, the committee is recommending a single tier, one rate for all structure, as it has negligible likelihood to be challenged. Our single tier, one rate for all recommendation includes all charges. This includes meter charges, water use, and system fees.
Additionally supporting one tier, one rate for all users, Foresthill once maintained a vibrant, thriving commercial economy. With the closure of the single largest employer in Foresthill in 1993 our economy has suffered greatly. It has only been in the last two to three years that we have seen a modest upturn in our commercial environment. This is a trend we have every intention to preserve. Our community survival depends on it and a higher rate for commercial users puts an additional financial burden on already tenuous small businesses.
Community input and the committee’s research have shown there is a slack and perhaps inconsistent billing practice for inactive, water-ready meters. The District should adopt a consistent and clear charge for this situation. The CAC recommends a turn off/turn on fee OR a minimal charge for meter reading and maintenance. If there is no water ready meter, there should be no charge. FPUD Community Advisory Committee Recommendations Report 4
Low Income and Fixed Income Rate Assistance:
The Committee did not research rate assistance programs, but understands other water districts are able to offer assistance for low and fixed income rate payers through various means, including County assistance programs. We recommend the District review and evaluate programs in other water districts to determine the legality of these programs, as well as source-of-funding recommendations.
Cost of New Meters:
Community input reveals there is concern regarding disparity and inconsistency in meter installation charges. Additionally, meter installation costs are perceived to be unreasonably expensive and unjustified, as well as a deterrent to much needed commercial growth.
The annual estimated growth of customers is low. For the first nine months of 2019 there have been 16 building permits issued for new homes in the District. That would suggest the annual fee revenue to be approximately $216,000. The estimated cost of the meter should be provided by the District to the customer, in writing, no more than one week from receipt of the application. This would serve to generate an expeditious and transparent process. In the event a letter stating the estimated cost of installing a meter cannot be sent within the one week time frame, the committee recommends the District send a letter clearly stating the reason(s) why the estimate will be delayed and when it is expected to be sent.
For each new meter installation, the committee recommends the District provide an itemized break down of how the estimated total cost of installing the meter was determined. After meter installation, the customer should receive an actual cost bill with the determined cost of the meter to be added or subtracted, as appropriate, from their next monthly billing.
Due to space restrictions the entire Community Advisory Committee Report has been abridged, however the complete report is available from Foresthill Public Utility District.
The Advisory Committee is represented by Larry E. Clarke, Tyler Harkness, Robyn Husmann, Bruce Littlefield, and Rick Velgos. They have performed admirably with their laborious endeavor in representing the Foresthill community.