Awash In Water

Gary Lovetro
PSWID board chairman

Gary Lovetro PSWID board chairman

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Lots of water.

No new rate increases.

Under budget and on time.

So why don’t you all love me?

That’s the gist of Saturday’s Pine-Strawberry Water Improvement District’s two-hour public hearing that resulted in the approval of a $3 million budget for the 2012-13 fiscal year, which includes a $128,000 investment in a fourth, deep well.

Despite the seeming gush of good news for the once water-crippled community, the tone of Saturday’s meeting at times seemed defensive, with repeated jibes directed at gadfly-critic Sam Schwalm, who sat quietly in the front row throughout

the two-hour meeting, interjecting only occasional questions.

PSWID Board Chairman Gary Lovetro hailed the budget reports and water supply estimates, saying “our water system is now drought resistant — it wasn’t before. It’s a fantastic deal for the community.”

The board unanimously approved a budget for the upcoming fiscal year that holds off on new rate increases, sets aside money for a fourth deep well, funds an all-out effort to track down leakage that consumes a quarter of the water produced and embarks on an ambitious effort to replace aging meters.

Resident Jim Hill rose to praise the efforts of the still-young water district, which has boosted water rates, but also roughly doubled the water supply and lifted a 20-year building moratorium that had blighted land values and spurred huge water-hauling bills.

“Our board of rookies is now solving problems some of us feared were unsolvable. Some members of our community have been very outspoken, even insulting. They were wrong. They were so wrong they now have to challenge every decision to save face,” Hill said.

Schwalm, an engineer who has doggedly challenged many board decisions, made no response — although later in the meeting he questioned whether the district ought to buy a proposed $100,000 computerized mapping program when it could perhaps more cheaply contract for the work. Chairman Lovetro said the district put that item in the budget but has deferred actually spending the money until it decides on developing a $100,000 master plan.

Schwalm has drawn the ire of board members and many residents for his persistent questions, including his challenge of the price the board paid for a deep well owned by Realtor Ray Pugel and his investment partners.

Pugel drilled that well roughly five years ago. When he hit water at about 1,100 feet down, he proved the existence of a deep water table. That transformed the debate about the community’s water future. The district later bought the well along with 7,000 square feet of land from Pugel. The district spent $150,000 assessing and upgrading the well, then paid $400,000 in cash to Pugel for the well. In addition, the district threw in rights to water meters on 50 homes and two commercial properties, which the district valued at about $7,800, said Lovetro. Subsequently, the district approved water impact fees and installation fees that now will cost a new homeowner about $3,400 for a new meter and a hookup to the system. Schwalm applied that subsequent value of a water meter to the cost of the Pugel well to arrive at a figure of $575,000 — a figure both Pugel and the water district dispute.

The district subsequently bought another deep well from a homeowners group and then drilled a second Milk Ranch well for about $188,000 on property it already owned adjacent to the first Milk Ranch well.

Lovetro said the money spent on the first Milk Ranch well helped reduce the cost of the next two wells, which were not as deep and had smaller casings to limit the yield to 85 gallons a minute, to keep from sucking up sand.

The four deep wells together will produce about 300 gallons per minute, close to the peak demand for the system — and more water than the yield of the existing shallow, drought-vulnerable wells, said Lovetro.

Lovetro said a hydrologist hired by the district estimated that the deep water table is so large that 12 wells pumping around the clock would lower its level by only one foot per year.

Some 60 people crowded into the Pine Cultural Center to hear the annual report and listen to the budget debate.

One resident complained of water pressure on her street so low that she couldn’t brush her teeth on the second floor on a busy weekend. Another, who has a second home in the community, complained about last year’s rate increase that imposed a $36 monthly minimum payment, even if a homeowner doesn’t use a drop of water for that month.

But most of those who spoke praised the district — and chastised its critics. Pugel rose to issue a veiled threat to sue Schwalm, saying that his “misstatements of fact” were “constant with intent to defame and malicious.”

Since borrowing enough money to buy out Brooke Utilities, the district has embarked on an ambitious effort to increase the water supply. The district this year also borrowed an extra $1.2 million to finance its capital needs, while paying a $35,000 loan fee. Lovetro insisted the district would have had to pay $300,000 or $400,000 to issue bonds.

The district now gets about $1.7 million annually from water sales and $300,000 from property taxes, which means it will have to spend another $1 million from the loan fund.

This year, the district relied on that borrowed money to fund about $1 million in capital expenditures. The budget includes loan payments of $411,000 and a $251,000 reserve fund. The budget for operations and maintenance totaled $1.2 million, the bulk of which goes to pay a consulting and engineering firm that manages the district.

The district planned to spend $4.6 million this year, but actually spent only $3.4 million. Most of the projects came under budget and the district carried forward $830,000 in capital spending it didn’t complete.

The capital budget is intended to save money in the long run. For instance, the fourth well will allow the district to cancel water-sharing agreements, which could save the district $93,000 annually, said Lovetro.

The budget for the upcoming year also includes a survey to find leaks in the system, which managers said could save $60,000 annually in wasted water.

The budget also includes money to replace old water meters. The district estimates that accurate water meters would save the district $100,000 to $150,000 annually in payments by homeowners, said officials.

The budget also includes a $976,000 payment to CH2MHill, the engineering firm that manages the district, plus $60,000 in other administrative costs and $76,900 for legal advice and board expenses. Capital expenditures for the year would total $736,000, including $150,000 for meter replacements, $125,000 for Milk Ranch Well 3, $150,000 for additional water storage tanks, $70,000 to replace water mains and pipes and $40,000 for generators to make sure the wells continue to operate in the event of a power outage.

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