Challenges to SLVWD Water System Plan

January 1, 2022

James F. Mosher

Our San Lorenzo Valley Water District (SLVWD) has a complex, aging, and antiquated infrastructure and needs major, expensive repairs and upgrades. This was the message delivered by AKEL Engineering Group when it presented the new Water System Master Plan to the SLVWD Board at its November 3, 2021 meeting. The Board hired AKEL to develop the plan to assess the system’s needs, prioritize repairs and upgrades, and estimate costs.

SLVWD’s challenges reflect three key factors: (1) a relatively small ratepayer base and rural, mountainous terrain; (2) several decades of deferred maintenance; (3) damage from the CZU fire, risks of future fires, and uncertainties associated with climate change and droughts.

SLVWD has about 7,900 ratepayers, a small number compared to other California water districts, yet it maintains 190 miles of pipeline, a relatively large number given the small ratepayer base. The district also has 55 water storage tanks (with 9.26 million gallons capacity), 2 water treatment plants, 8 wells, 7 stream diversions, and infrastructure to pump water throughout its mountainous region. Maintaining the system while keeping water affordable is a major challenge.

The system’s maintenance needs were largely neglected in the decades prior to 2017. In that year, the Board enacted a major rate increase to fund long-term maintenance and capital improvements. Many ratepayers opposed the rate increase, and three board members who voted for the increase were voted out of office in 2018. This possibly explained why previous Boards deferred maintenance despite the long-term problems that would result. The 2017 rate increase provided the needed revenue for the District to take out long-term loans and begin a maintenance and capital improvement program, which is now in progress. However, AKEL detailed significant challenges over the next two decades: pipeline improvements, $57.3 million; storage improvements, $17.0 million; other improvements, $1.0 million; TOTAL: $75.3 million.

The deferred maintenance problem is exacerbated by the damages to the system caused by the CZU fire, estimated to be at least $20 million. The District hopes that most of the costs can be reimbursed by state and federal agencies, but has imposed a 5-year fire surcharge fee ($9.67/month for residential customers) to defray anticipated shortfalls. Another issue is that recent water usage has fallen significantly short of projections due to the early rains last October and large storms in December. Staff is now anticipating a $900,000 shortfall in revenues for the current fiscal year. A “rate stabilization” increase may be necessary to recoup some of those losses. The District similarly anticipates future disruptions and costs associated with climate change and droughts, including required contributions toward bringing the Santa Margarita groundwater basin into sustainability as mandated by the State.

How do we address these increased costs while maintaining affordability, particularly for SLV residents with limited incomes? The District should clearly do its utmost to identify both potential cost savings and potential grants, but future rate increases nevertheless appear likely. FSLVW has been at the forefront in promoting the Rate Assistance Program, which provides financial help to those with limited means. A significant expansion of the RAP program needs to be included in discussions as the District addresses these infrastructure needs and costs. FSLVW also supports developing a tiered rate structure so that heavy users, who usually have higher incomes, pay higher rates for heavy usage and thus promote conservation.