Mountain View and airport water systems due for new billing system
Douglas County officials are working out a new billing mechanism for the troubled airport and Mountain View water systems which means an increase in rates and the first steps toward a countywide utility.
Commissioners discussed the new billing system last week and hope to adopt the rates at their Oct. 2 meeting. With only two customers of the Mountain View system in the audience, however, the board is looking for additional input.
“This is another case of taking over a water system that needed a lot of repair,” said Commissioner Kelly Kite, who represents north Valley residents. “All the profits had been taken out of it and nothing was returned to upgrade or maintain it. Then the residents are victimized by it, too.”
The water systems have about 1,300 customers who are faced with paying off a $3 million bond borrowed by the county to upgrade the system. The goal of the new rate schedule is to make the water system self-sufficient so the debt is not retired through the general fund at the expense of all county taxpayers.
“There are two answers,” said Kite. “One is to have taxpayers of the entire county continue to subsidize it, or, two, to have residents pay for their own water system.”
Kite is frustrated that so few people showed up for Thursday’s meeting. He said about 30 to 40 people attended an Aug. 18 neighborhood workshop, but he’s still looking for additional input.
“Probably the most frustrating thing is that people think there is no need to show up at the meeting because the county is going to do what it wants anyway,” Kite said. “Part of that statement is true. We do have to make the water system pay for itself, but I am always open to suggestions. I would really like some opinions on the zero-based cap for those who are not huge water users or those trying to conserve.”
Kite is proposing that the lowest tier for water users be based at zero gallons instead of 10,000 gallons, which it is now, or 8,000 gallons as proposed under the new structure.
“If the percentages are correct, 42 percent of the people use small amounts and subsidize large users. That means if a person uses only 4,000 gallons a month, and the cap is at 10,000, they are paying the same as if they were using 10,000 gallons. That means they are paying for 6,000 gallons of water they are not using,” Kite said.
Most Mountain View residential customers with 3/4-inch water lines pay $15 with a $1 per 1,000-gallon charge in excess of 10,000 gallons per month. Airport customers pay $12.50 per month with a 75-cent per 1,000 gallons charge in excess of 10,000 gallons of water. Under the new system, customers of both systems would pay the same with the proposed increases currently being debated by the board.
Consultant David M. Findlay, president of Financial Consulting Solutions Group Inc. in Redmond, Wash., hired by Douglas County to set up a rate model, is proposing two structures which make billing the same for Mountain View and airport customers and begin to pay off the $3 million bond.
“Over the next four or five years you have to make a serious financial obligation,” Findlay told commissioners last week. “You have a serious fiduciary responsibility to keep the system healthy. A lot of private, homeowners-run water companies are going bankrupt because people won’t put money in them. A municipality can’t walk away from it. You are dealing with a real sensitive, very expensive issue.”
He told commissioners not to expect the system to break even until it serves 5,000 customers.
“The fiscal policy is to get this system healthy,” Findlay said. “We’re asking you (the county) to literally carry administrative costs for the next five years. That includes legal, personnel and administrative. You can’t get healthy all at once.”
Kite said he is hoping for a large turnout at the Oct. 2 meeting.
“I’ve met and talked with as many people as I can, but it’s still a very small representative sample,” Kite said. “This issue is difficult to understand and it’s emotional because people’s bills are going to go up. But if we don’t address this now, the general fund is going to continue to grow and we would probably still be cutting county services. We’ve only been paying interest on the $3 million bond. Next year we will have to pay interest plus a principal payment.”