By GARY ARANT
Wow, the world moves ever so fast today on social media. Last week a newspaper article talked about the Valley Center Municipal Water District having to raise rates 6.9% for domestic and commercial and 8.3% for commercial agriculture. No sooner did the article hit the net, Facebook was on fire with some pretty interesting stuff . . .
LCC wrote they “Should sell off some of their property they don’t use instead of charging us more to buy more land….”
RG wrote back, “LCC, I am confused by your comment. The article doesn’t discuss land, have you heard something….”
KM jumped in and said, “I’m curious about the land, lots of rumors floating around about it….”
A little flustered, GR added, “?”
Finally, RW said, “Show us the justification” (for raising rates, I assume).
Let’s talk about RW’s comments first. We agree VCMWD should have to justify why our Board of Directors voted raising rates on you and on themselves as well.
As it said in the article, the main driver was the $1.4 million overall net increase in the wholesale rates charged by MWD and the SDCWA which supply 100% of our water. When the wholesale rate goes up, the only prudently fiscal thing to do is to pass it through to our customers. The other option is to draw down our reserves and/or stop reinvesting in our water system by replacing pipelines, and upgrading reservoirs and pumps stations. We did raise rates to offset our local costs, representing 0.3% of the total increase.
Many would respond that we should reduce our staff because our water sales are down. However, as pointed out in the article, very little of what we do is related to how much water we deliver in a given year. Our main activities are operating, maintaining, repairing, upgrading our infrastructure systems, and responding to emergencies and customer service requests; all of which are required to reliably meet your water supply and fire protection needs. We need to have enough experienced, trained, licensed staff to do all those tasks spread over our 100 square mile service area; a staff that has been reduced in size by more than 30% over the last 10 years.
Now let’s focus on the conversation between LCC, KM, and GR about the land issue.
VCMWD does own a lot of land, over 108 individual parcels with individual parcel size from ranging from 0.01 acre to 59.95 acres, totaling 537 acres located mostly in but with few outside the District. Almost all that land is occupied by District facilities, such as the 250-acres under and around Lake Turner, the 42 other reservoir sites, the 27 pump stations, 21 pressure reducing stations, 8 aqueduct connections, two wastewater treatment plants, wastewater lift stations, reclaimed seasonal storage reservoirs, and the District Corporate Administrative and Operations Facility on Valley Center Road, just east of Cole Grade. There are several other vacant parcels owned by the District. Some of which were formerly occupied by old, abandoned facilities and several purchased in advance for planned facilities, such as two new reservoirs and a new Corporate Facility. Our approach has been to purchase and bank those facilities today at a lower cost while land suitable for the District’s anticipated needs is available.
The one specific property mentioned in the Facebook exchange was the 32 acres on Lilac Road across from the Valley Center Community Hall and Betsworth Road. This land was purchased in the mid-2000’s with the intention of building a new Corporate Operations and Administrative Facility to replace the one at 29300 Valley Center Rd. At that time, the community was facing explosive growth and we were concerned that it would not be long before we outgrew our current location. As such, the property involving four individual parcels was purchased at $1.5 million. Of course, right after the District purchased the property, the housing market and the economy tanked, the country went into the “Great Recession,” and any plans we had for developing the new site were shelved.
Since then, the property has been preserved and opened for limited community use, such as for the Western Days/Valley Center Stampede Rodeo Festival Days, the VC Fire Safe Council Wood Chipping Days, Relay for Life Yard Sale, as well as parking for other events. Also, since that time, the property has increased significantly in value.
Some other factors have changed since the decision was made over 10 years ago to buy the Lilac Road property. The existing Corporate Site, then and still served by septic disposal, will now be a part of the North Village Wastewater Collection and Treatment System. This will free up the land for site development currently dedicated to subsurface disposal. Also, 0.6 acres of county land wedged between School Bus Lane and existing Corporate Facility boundary was declared surplus and purchased by the District. Finally, with a downsized community plan population, and the implementation of various labor saving technologies (remote meter reading, remote water/wastewater system monitoring and control, online and paperless billing, to mention a few) the number of employees the District and the Corporate Facility space will need at full build out is projected to be significantly less that projected in the early to mid-2,000’s.
With all of these changed circumstances, the Board felt it prudent to fully reexamine the logistic and financial factors to the options of staying in the current location versus moving to the Lilac Road Property. That study is being done by an outside planner, and the results are expected in the next 30 to 60 days. To the rumors referenced by KM, this issue has been openly discussed by the VCMWD Board and, in fact, staff has been contacted by representatives of the Valley Center Parks and Recreation District and Valley Center Fire Protection District, along with private development interests as to VCMWD’s future intentions with the property.
If the VCMWD Board does take the option of keeping its Corporate Facility at the current location, 29300 Valley Center Road, it will likely consider selling the Lilac Road Property. If that is the case, VCMWD has an obligation to sell it at the appraised fair market value, and has to offer it to public agencies, including the County of San Diego and the other local public agencies first, prior to selling it to a private interest. Proceeds from the sale of the property would go back into the District General Fund, offsetting future capital costs, including those that might be incurred developing and modernizing the exiting Corporate Facility.
Finally, to LCC’s concerns, we are not raising rates to make more money to buy more land. First of all, we are a public water agency and set our rates and charges to pay for the cost of operating the District. There are no profits or shareholder dividends. Secondly, we are not planning on buying anymore property at this time.
I guess VCMWD is going to have to watch Facebook more often.
Gary Arant is general manager of the Valley Center Municipal Water District.