At its second budget meeting on Tuesday, April 4, the Virgin Valley Water District Board voted 3-0 (two absent) to accept a tentative budget that includes capital outlay of $10,785,000 and a 5 percent employee raise. Its formal budget for fiscal 2017-2018 must be submitted to the State by end of May. A complete copy of that budget can be found on the District website, www.vvh2o.com.
The budget projects operating and non-operating revenues of $11,181,000, a $426,000 increase over 2017, stemming from higher water use as well as a $10 monthly debt surcharge fee and higher impact fees initiated through the 2015 legislative act RS271. Letters will be sent to all those affected by the increase in fees.
Those increased revenues, however, fall short of covering the proposed expenditures of $18,840,906, with cash moved from existing capital replacement, money market, and other designated accounts to cover the $7,659,906 difference.
Board Member Barbara Ellestad commented on the proposed employee salary increase included in the budget, pointing out that the original budget proposal called for a 4 percent increase for all employees except District Manager Kevin Brown and Finance Manager Wes Smith. She asked for salaries to be raised to 5 percent causing an $11,000 increase in the proposed total salary outlay. She cited the years that VVWD employees served without pay increases and their loyalty to the welfare of the district prior to board action to increase their compensation by 5 percent in FY 2016-2017 and 5% in FY 2017-2018. Board Member Rich Bowler, endorsing that increase, saying, “The Board spends considerable time caring for other district assets and little time focused on its most valuable asset, its people.”
Following the special budget session, the Board held its regular meeting, where it voted unanimously, 5-0, to accept a Master Plan update prepared by Bowen, Collins & Associates. The plan had been presented in four parts at earlier meetings, and conclusions in that study are being used to project a $34 million capital improvement plan over the next 10 years.
Aaron Anderson reviewed BC&A’s 2.75 percent annual projected population growth of the valley, along with steps that must be taken to serve that growth. New wells, distribution lines, storage and treatment facilities must be built to serve the population that uses an average of 410 gallons of water daily in each equivalent dwelling unit and 820 gallons on peak use days.
Relevant to the 2017-2018 system capital outlays, the District plans a $1.8 million replacement of the Flat Top water tank due to its current elevation interference with full capacity use of the Airport water tank and inability to serve the Pulte development. That project is referenced as the Northwest Tank and Transmission Line project in district documents. Other major 2017-2018 outlays will be completion of Well 27 abandonment and the hookup of Well 27A at Pioneer Blvd and Oasis Blvd, building an arsenic treatment plant for Well 1A on the south side of the Virgin River, and transmission structures that are part of multi-year projects.
All data from the updated Master Plan, financial data, water consumption data, water production data, and rate structure data, is being loaded in a new software program, Waterworth, and will be used to calculate water values and study options for setting rates. Smith is seeking to set up a Board training session with a software specialist on April 18.
In their status updates on key projects, District Hydrologist Aaron Bunker and Brown announced that Well 1A design is complete, Well 27A abandonment is proceeding, and the 24” casing and 16” carrier pipe were installed in the Virgin River Transmission Line last week. Mesquite Contracting is currently installing a new 16” water pipe on Riverside Road. Interior coating work is completed at the Airport Tank and the district is waiting for lab testing results before turning the tank back on.
In other business, Board President Nephi Julien and water user Blaine Rees brought forward a discussion of Rees’s Enterprise billings that have occurred since rates were increased in 2015.
Rees maintains he is overcharged for the two hookups he uses at his gravel operation south of the Virgin River. He has had several conversations with district staff concerning the classification of his water use as commercial use vs. construction use.
Rees maintains that his operation qualifies as 50 percent construction use of water, which is sold at a flat rate of $3.75 per 1,000 gallons, instead of the tiered rate he pays where his cost jumps from $3.50 per 1,000 to $5.00 per 1,000 gallons with higher usage. Staff prepared a summary of Rees’ water usage and costs over a three year period, compared to a similar customer. Findings show approximately the same amount of water use and payments to the District by both parties.
The Board agreed to a proposal that Rees apply for installation of a hydrant where he could draw water for legitimate construction use, as a potential savings on his future water costs.
A cost estimate will be done to compare current billings with a reconfigured system with a
hydrant. The Board declined his request for waiver of a late fee levied in 2016 on an overdue billing citing standard charges must be applied equally to all customers.
The District is awaiting quotes from two bids let for repair of the VVWD building front where
a passenger car damaged the stucco, drywall and framing on March 23. A police report was filed and insurance claims are in process.