PRWID Board Delays Decision on Tax Increase
A public tax hearing at the Price River Water Improvement District started off in a dark room on Tuesday night because of a power outage, but by the time it was all over enlightening comments and figures from both the staff of the district and the public brought light to the subject of increasing taxes of those in the district by 93 cents per month.
The districts staff began the session by explaining the reasons for the requested tax hike.
"Part of the problem we are having is with the escalating bond structure payments we must make each year," said Jeff Richens, assistant district manager. "We have been able to meet those obligations in the past, but this year to do so we depleted our reserves. Next year, under the current structure, we are not sure we can meet our bond payments in April unless something is done."
Richens listed the reserves the district has had over the last few years. The reserves reached a high in 2002 with over $2 million in them, but by June of 2005 only $272,705.78 remained. Richens told the group of about 20 citizens that that level of reserve puts the district on the edge of default of their covenants concerning the bonds.
He also pointed out that the escalation of the cost of the bonds will continue. This year the payment on revenue bonds was $942,701.69. Next year it will go to $970,035.69 and in 2007 it will increase even more to $987,249.29.
But beyond the cost of the bonds, which the district admits the increase will only slightly help, is the escalating cost of doing business. As the meeting went on, the district staff and supervisors also presented a gloomy picture of ballooning costs for materials, chemicals, equipment and fuel.
Supervisors from the waste water plant in Wellington, the water treatment plant in Price Canyon, the distribution system maintenance department and the fleet maintenance presented double digit increases over the past few years for many of the materials and services they use daily. Some also brought to light the fact that, because of the districts increasing costs, they have had to cut back on maintenance and replacement of various systems over the past five years as well.
"One of my concerns on this lack of maintenance is that one day it will come back to haunt us," said Clay Wright the supervisor over the sewer collection system and water distribution system maintenance."
Both Bryant Harris, the supervisor of the waste water plant, and Ken Snook, superintendent of the water plant, said that upcoming changes in EPA regulations state requirements will also increase costs. Harris said that the permit that expires in 2006 for water release into the Price River may be revamped with renewed regulations on salinity removal.
"I have no idea what the expense of installing a system to take that out would be," he said.
Wright pointed out that the state is also planning on requiring that 25 percent of any sewer systems be surveyed annually by a video study, which will mean the cost of the equipment and manpower to operate it. In addition he pointed out that district had a number of water lines that need to be replaced because they are either asbestos or steel.
"The state has given us plenty of time to replace those asbestos lines, but that time is running out and we haven't done a thing on them," he said. "We just can't keep doing this."
Fleet manager Tony Mower reported that not only have equipment and repairs costs increased in the past few years, but that fuel is outstripping budgets.
"Between 2002 and 2005 our costs for gasoline has gone up 82 percent and for diesel fuel it has gone up 89 percent since 2001," he stated.
With the reports from the staff completed, board chairman Keith Cox opened the discussion to the public for comment. It was a very different meeting from the first hearing held last December in the same board room on the same subject. This time there was a lot of questions and some opposition to the proposed increase.
"I am concerned about everyone, but particularly about those on fixed incomes," said Bob Tanner. "People can't afford to have their taxes go up and up. Over the past couple of years with things increasing the way they have I have had to cut back my lifestyle and do with less. I can't take care of my obligations without doing that. The district may have to do the same."
He also pointed out that he thought there was a lot of waste going on, as he said was demonstrated by the Carbonville water and sewer projects.
"There were men standing around over there during construction all the time and the roads (condition after the construction) is a testimony to the (lack of) pride of workmanship."
District manager Phil Palmer pointed out that the men standing around belonged to the contractors doing the jobs, not to PRWID. He also said that on Wednesday morning he was meeting with the county road department and paving company to fix the roads.
"We haven't finalized these projects with the contractors yet, so they will be paying for fixing those roads where it is necessary," he said.
Helper Mayor Joe Bonacci asked the board and staff if they were also considering a rate increase to go along with the tax increase as well.
"Obviously, depending on how the board acts, we will have to look at that," said Palmer. "But the fact is that this tax increase would not provide enough money for everything. We will be looking for other increases."
Bonacci then asked if the take over of other systems and increases in the size of the system are that important, considering the costs involved.
"Take the Carbon Canal winter water project," he said. "Is that necessary? Is it going to pay for itself."
Richens explained that the cost of the project, which is presently being installed, is being totally paid for by the Bureau of Reclamation.
"There have been no district funds expended on it except for some spot checking we are doing with our supervisory staff during the project," said Richens. "Do remember that once the system is turned over to us, however, and five years down the road if something breaks, it will be our responsibility to pay for fixing it."
This brought some comments about taking over too much without people paying their fair share to maintain the system.
"One of the things you need to remember is that each of these winter water hookups is only put in when the owner of the property pays a $400 impact fee to hook it up," stated board member Tom Mathews. "We get money from them for the hookups."
However Wellington city councilmember Johnny Pappas said he was concerned about new developments not paying their way.
"My feeling is that people who build subdivisions or add projects onto PRWID's system should give us soundly engineered systems so others do not have to pay for it later," he said.
Dion Kone also came up to the board and said that he was concerned about the same thing.
"I keep getting the feeling we are helping developers," he said. "My question is are we getting enough money when we are taking systems over?"
Richens once again pointed out the $400 impact fee new hookups pay and said that the board could decide to set those fees higher, but has not because they are concerned about stifling growth in the area.
Other comments came from Linda Varner who was concerned about the fact that charges to customers should be explained to them up front and Steve Tanner who asked that the board wait to make a decision until citizens can review last years audit of the district.
Price Mayor Joe Piccolo, who sits on the states water quality board, also spoke about the potential increase.
"I challenge this board to be sensitive to citizens needs," he said. "Price has been facing some revenue shortages too, so I understand how hard this is. But when I look at what seems to be an insatiable desire to keep expanding and a $13 million debt on an annual $4 million budget I am concerned," he said.
Mathews asked Piccolo if Price has had to raise rates or taxes in the last few years and Piccolo responded that they had done that only with one electrical project where those served by that system had to pay and extra $5 per month.
After all the comments were done the board adjourned for a few minutes and then came back to discuss what to do. Because of some of the requests from the audience and concerns they voiced, the board voted to put off the vote whether to increase the taxes or not until August 23 when they will hold a special meeting to discuss it at 6 p.m.