8/9/2012 & 8/13/2012 AWA Board Meeting Minutes

  • 45% Water Rate Increase May Be Delayed Until After Election

    After learning that two AWA directors will be contested in this November’s election, the AWA Board twice decided to stall sending out water rate increase notices. They voted to postpone approval of the rate notice a full month until September 13th, despite their attorney having expressed great urgency to get the rate increase notice sent to the ratepayers. When asked why suggested new rate structures had not been presented sooner, General Manager Gene Mancebo confirmed that it was after RPA had publicized that the first proposed rate increases would be as high as 45%.

    Politics may be at play here. Directors Thomas and Farrington face re-election in November. After the AWA meeting on August 9th, Jim Ulm (Ione, District 2) and Gabe Gottstein (Volcano, District 3) filed to run against Thomas and Farrington, respectively. Bill Condrashoff observed, “Raising rates during the campaign period will hurt the incumbents' chances for re-election. I believe AWA will stall the rate increase until after the election.”

    Below is a timeline of events surrounding the delay.

    Back on July 26th, the AWA Board of Directors approved sending out notices of rate increases, which are as high as 45% in some areas. However, the board asked to review the notices at the August 9th meeting before sending them to ratepayers. General Manager Gene Mancebo did not prepare the notices for the Board’s review on August 9th. Instead, he presented a new rate plan.

    However, before the August 9th meeting, board members privately talked to their general manager and discussed an alternate rate plan. Several ratepayers cried foul when hearing of the private discussions between Mancebo and board members. After Gary Thomas, Paul Molinelli and Bob Manassero all admitted that they discussed the alternate rate plan with Mancebo, Bill Condrashoff said, “That’s a Brown act violation,” referring to the fact that both honest representation and State Law require that public business be discussed in public at meetings held for that purpose.

    Mancebo denied that the discussions violated the Brown Act, saying that he only communicated his personal views to the Directors and did not convey the opinions of any Director to the others. Mancebo says he received no direction from the Directors in the secret conversations. If so, then how did Mancebo know that the Board did not really want to review the rate notice that they had directed him to prepare, and why weren’t the Directors surprised that their orders were not followed?

    Next, the Board scheduled a special meeting for August 13th to review the rate notice. Once again, Mancebo did not do as he was directed. Instead, he had yet another alternate rate plan. It was formulated that very morning with consultant Bob Reed, who gave a presentation.

    The new plan attempts to solve a problem with the older plans. As reported by RPA, AWA wants to form a Community Facilities District (CFD) into which certain property owners would pay increased property taxes. In exchange, they would be guaranteed water if they ever developed their property. That plan makes sense for paying down the debt on the Amador Transmission Line (ATL), but not enough property owners have agreed to join the CFD to meet the initial assumptions in the rate study.

    The new idea brought forth by Mancebo and Reed uses certain restricted funds collected specifically for other purposes to pay part of the debt on the ATL. Ken Berry asked who was going to make up those funds. Bob Reed and AWA attorney Steve Kronick insisted that the Board was not actually required to follow AWA’s fee plan and, by implication, that the ratepayers would have to make up the missing funds at some future time. Unsatisfied with the responses, Berry asked, “If the studies don’t mean what they say, why did we pay Reed over $130,000 to make the latest one?”

    The latest rate plan has not been completed for Director approval. The proposed rate increases are based on summaries presented by Reed. Berry also told the Directors that he thought it was bad policy to divert restricted funds to make up the CFD shortfall.

  • Upcountry Vote on GSL Property Tax Planned for February 2013

    To pay for the Upcountry Gravity Supply Line, AWA is proposing an estimated $100/year tax on all properties in the GSL Community Facilities District (Upcountry). The ballots should be sent out around February 1, 2013 and the vote certified in March 2013. If more than 1/3 of voters object, the tax will not be enacted.

    At the August 9th Board meeting, AWA staff gave a status report on the upcountry Gravity Supply Line project. Although ratepayers refused to pay for the GSL in 2010, the AWA Board continues to spend ratepayer funds on the project. Several of the tasks needed to ready the project for funding are over budget, and General Manager Gene Mancebo stated that $1,270,000 has been spent on the project to date.

    A map of the proposed CFD will be available in September. The preliminary map submitted to the County encompasses an area approximately three times larger than that currently served by the CAWP (Upcountry) water system. That is consistent with the GSL capacity being 3 times what is currently used. The GSL will supply 3 times as many homes, producing 3 times as much traffic on Highway 88, etc. None of the consequences of that extreme growth has been considered by the AWA Directors or by the Board of Supervisors, who are also promoting the project.