by Bruce Holloway
The Lompico surcharge was my baby. I conceived it. I asked that it be limited to five years. I recommended that it taper off. Now it's time to kill it.
This happened years ago, before most of our San Lorenzo Valley Water District Board of Directors was elected and before the current SLV Water District general manager was hired.
SLV began discussing a merger with the Lompico County Water District in the spring of 2010. A committee was established with two board members from each district and discussions were held behind closed doors. At the end of 2012, meetings were opened to the public.
My idea of a surcharge was in response to Deb Loewen's suggestion that there be “economies of scale” due to the merger. Loewen was on Lompico's Citizens Advisory Committee for many years and was an advocate of the merger.
It was a reasonable argument that the cost of water service in Lompico would ultimately be reduced by being part of a larger district. But I thought she went too far when she claimed that SLV would also experience cost reduction by adding Lompico. The SLV Water District had about 7500 connections and Lompico had about 500.
When this was discussed in 2013 and 2014, most of the meters in the SLV Water District had a magnetic readout that could be read by a single employee waving a wand. The meters in Lompico used older technology and needed lids removed to do a visual readout, which took more labor.
Also, SLV's water facilities had electronic SCADA (Supervisory Control And Data Acquisition) systems so they could be monitored and controlled remotely. Lompico had manual controls that needed to be operated in person, which again took more labor.
Until investments were made in new meters and SCADA systems, Lompico's water system would continue to be less efficient than SLV's. The money would come from bond sales and it was expected to take a couple years to issue the bonds and install the equipment.
SLV never promised to provide a separate accounting of expenses in Lompico after the merger, but the agreement gave the SLV board discretion to reduce the surcharge. Lompico was expected to have zero cash on the date of the merger.
It turned out that Lompico wound up with $229,000 in cash. The SLV Water District used this money right away to pay for new meters and a SCADA system.
The Lompico Water District's audited financial statement shows two major liabilities: $126,000 to pay off bonds issued in the 1970s and a $108,000 unfunded pension liability. The bonds will be fully paid through property taxes collected by the county. The unfunded pension liability was no worse than that of any local government. SLV's is $2.7 million and Lompicans share that burden now. It's unreasonable to make Lompico pay $234,000 toward those debts.
The Lompico surcharge will raise $141,000 in its first year and $234,000 in the remaining four years. SLVWD should terminate it on the first anniversary of the merger, June 1. It has led to ill will and turned out to be unfair. Let's recognize Lompicans as members in good standing of our water district, not second-class citizens.