Bob Fultz Response to Question #3:

Note: Some of the current challenges the SLV Water District faces require large financial commitments on the part of the District, which will eventually need to be paid either from rate increases or grants. In light of that, how would you answer the following?

I don't agree with this group’s premise about the way to address this issue.  We need to face the fact that our operating expenses have skyrocketed during a time where we (a) produce and use much less water due to the incredible conservation efforts of our community over the last decade, reducing indoor water use per person per day to almost 20% under the ultimate state goal of 50 gallons and (b) the number of customers has remained stable.  At the same time, the District has not been quantitatively transparent about the benefits that our community--our owners--are receiving in exchange for these massive increases in operating expenses and the overall cost of water.  In other words, what is the Return on Investment for almost doubling (97%) operating expenses since the 2013 rate increase?  At a time when inflation was, until recently, less than 2% per year on average.  Please remember that as the cost of an average bill (about 4 units) has increased by 168% since 2013.  These numbers are not sustainable at a time when our infrastructure upgrade requirements and unfunded capital obligations are larger than ever—and every year that unfunded burden on our community increases even more.  As a District, we need to get our fiscal house in order and show fiscal restraint in operating expenses before asking our community to continue absorbing massive rate increases for an unstated quantifiable benefit and where most of the rate increases is not going towards infrastructure improvements, particularly in light of today's economy where many families are struggling with high costs for fuel, food and housing.

Grant funding is great when available and we need to leverage it as much as possible.  But grant funding comes and goes depending on the economy and politics and the appetite for spending at the state and federal level.  By contrast, our community’s infrastructure and maintenance needs are constant and unchanging. 

My promise to our community is that I will continue to work towards a better financial model, including a real financial plan for the use of funds collected by any proposed rate increase, and whose plan timeframe matches the duration of any proposed rate increase, with complete transparency between funds use for operating expenses and funds applied to capital obligations—like infrastructure.  This is the only way that our community can exercise their role as owners of our District and make an informed decision about the use of funds in any proposed rate increase—and vote accordingly.   I’m looking forward to representing the interests of our community at large, and not just special interests, by having a robust, transparent and forthright community conversation when that rate increase proposal comes to the Board.

3.  Fire-recovery and infrastructure repairs will require substantial additional funding. What are your recommendations for how SLVWD should remedy this need?

For the CZU recovery efforts, FEMA is covering up to 90% of allowed repairs.  We should get some state funding for some of the rest.  Grants and our District's capital cover the balance.  I favor burying our raw water supply lines on Ben Lomond Mountain to protect them against the possibility of future fires.  We can do this in an environmentally responsible and safe fashion that doesn’t involve building elaborate roadways.  Grant funding for CZU recovery is available and we should take advantage of it for as long as it is available.  One of my previous campaign promises was to hire a grant writer, and the Board, working together, made that a reality.  The Return on Investment (ROI) for our grant writer is currently over 70:1, which is outstanding. 

For regular infrastructure improvements, the last two rate increases were sold as being needed for infrastructure.  Please refer to the two press releases accompanying the rate increases:  2017 (https://www.slvwd.com/sites/g/files/vyhlif1176/f/uploads/rate_increase_approval_press_rls_9.22.17.pdf) and 2013 (https://www.slvwd.com/sites/g/files/vyhlif1176/f/uploads/slvwd_rate_increase_decision_press_rls_10_25_13_final.pdf).  You will note that these announcements did not indicate that the vast majority of the increased revenue from the community would instead be for day-to-day operating expenses.  In fact,  2/3 of the additional annual revenue collected by the District since 2013 went to operating expenses that skyrocketed during that time.  This needs to change or our District will never catch up on our infrastructure and unfunded liabilities and, ultimately, our failure to implement responsible fiscal policies means that we will lose the trust of our customers as well as unfairly burden the next generation.  It is our job as Board members to exercise financial oversight and set policies that will not only deliver clean water to our customers, but keep in mind the affordability based on economic realities within the full range of our community while ensuring that our infrastructure is steadily upgraded every year and that we do not incur unfunded liabilities.  There are people that say that communities like ours need to rely solely or mostly on grant funding for infrastructure.  In my opinion, depending on the “kindness of strangers” is not a plan—it is only a hope.  Grant funding is great when available and we need to leverage it as much as possible.  But grant funding comes and goes depending on the economy and politics and the appetite for spending at the state and federal level.  By contrast, our community’s infrastructure and maintenance needs are constant and unchanging.  My business background, having worked on many strategic plans, underlies my conviction that real strategic planning does not depend on hope.