My Turn: Rate increases during challenging times | SierraSun.com

My Turn: Rate increases during challenging times

C. Kelly Atchley
President of the Tahoe City PUD Board of Directors

Over the last 18 months Tahoe City Public Utility District has undertaken a very open and public process to adopt a comprehensive study to determine necessary water and sewer rates.

It is very clear that it is time to begin replacing the District’s 40-year old infrastructure. In addition to replacing what’s already in place, new code requirements must be addressed. Some areas of our water systems do not meet current requirements for secondary source and for adequate fie suppression as required by the Department of Public Health and fire code.

It is the District’s goal to bring all areas of its water system into compliance with current fire suppression requirements as quickly as feasible. Additionally, the development of new sources for water is necessary because of rapidly increasing water consumption by the District’s customers.

The rate-setting process included study sessions that resulted in:

Establishing monetary reserves based on recommendations from our auditors and the Governmental Accounting Standards Board.

Setting customer rates that provide funding to address critical capital infrastructure needs.

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Setting a rate structure that encourages water conservation at every level and addresses reasonable outdoor water use.

Establishing a policy on the use of property taxes that results in equitable use and benefit to all customers paying those taxes.

The Board directed staff to hold all day-to-day operational increases to the absolute minimum so that the vast majority of the funding generated by the increased rates is expended for capital projects specifically addressing infrastructure needs. After a thorough review and numerous public workshops, the Board has adopted a 5-year capital plan requiring $14 million in water infrastructure projects, and $6 million in sewer projects. These projects are not “discretionary”, they are truly necessary infrastructure that must be constructed.

Also during the rate study process, the Board addressed the current and future use of property taxes paid to the District by all of its property owners. The Board has eliminated the use of property taxes from operations and maintenance of our water systems and established a clear policy for future use of property taxes.

This policy ensures that all District taxpayers, those within our water system as well as those served by private and mutual water companies located within the District, will receive equitable benefit from property taxes they pay to the District.

Finally, as we transition to consumption-based rates (rates based on amount of water used), the Board studied a number of options for metered rates. A thorough analysis was done on current costs of water, capital infrastructure needs, use patterns of our customers, and state-wide best practices for rates and conservation. The resulting recommendations are based on all of these factors and are well-founded on best practices in the industry.

As your elected Board Members we know how challenging these times are for our community. How our funds are used is critically important to all of us and we must continue doing the best to keep TCPUD one of the most efficient, effective organizations in the state.

We encourage all of our constituents to engage with us in our budget and rate-setting for 2009. The next meeting is Monday, Nov. 24, 2008. The rate and budget items will begin at approximately 8:30 am. We hope you will attend.