Pine Water District Scrounges For Ways To Pay For Repairs To Neglected System

John Nelson

John Nelson

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The Pine Strawberry Water Improvement District faces an uphill battle in its effort to repair an aging water system that fell into disrepair after 50 years of neglect before the district bought the system from Brooke Utilities.

That’s what came out of a March 28 PSWID board meeting in which former Assistant Gila County Manager John Nelson told board members that 94 percent of the water mains in the two towns are 4 inches or smaller and therefore inadequate for a delivery system.

Nelson delivered an even more perplexing forecast, telling members that if the PSWID budget and rates are not revamped, the district will lose about $178,000 next year.

Nelson, who just retired from Gila County and is considered a financial guru, is volunteering to help the district work through its financial problems.

Nelson appeared before the board to receive input from the members about what they consider important in crafting the new budget.

Members said setting reasonable water rates customers can afford remains their top goal, but they also want to re-establish a contingency fund and set up a capital improvement budget.

Much of the discussion centered on what the contingency fund should include.

Some members pushed for $500,000, but co-chairman Gary Lovetro favored $750,000 in case of emergencies.

The board didn’t make a decision, however.

“John will submit to us an amount that meets the needs, but bears in mind that we cannot indiscriminately raise rates beyond the public’s acceptance,” said board president Ray Pugel.

Board members also discussed the best ways to generate revenue to keep the district solvent and pay for much-needed improvements, including boosting property taxes, raising rates or asking voters to approve a bond issue.

“Taxes is a stable way to know that funds are in place to implement improvements,” Pugel said. “Property taxes are also tax deductible.”

A bond, Pugel added, “would raise taxes on property for the next 20 years and no one likes their taxes raised.”

However, Pugel and some board members agreed a bond would provide the money to make improvements more quickly, including installing fire hydrants that could reduce homeowners’ insurance costs. Acting quickly would also reduce waste. Currently, 30 percent of the water in the system leaks out before it reaches customers. Moreover, a bond issue would lock in today’s lower interest rates.

“We would be locking in our costs and paying off the debt with tomorrow’s inflated dollars,” Pugel said.

Nelson will take into consideration the members’ concerns and on April 25 submit a recommended budget to the board.

Comments

Michael Warren 1 year, 8 months ago

No new taxes.

PSWID has tripled the monthly cost of water and can't seem to run the water business without corruption, infighting and accountability to those paying the bills.

Those who consume the water should be paying for the water, not spreading the costs to those who consume the least. The majority will NOT pay for the minority.

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Deb Schwalm 1 year, 8 months ago

Fix Up or Build New?
Constant water leaks occur with our current PSWID water system and the community is faced with continual repair costs. The community doesn't want higher rates or higher taxes. This aging water system was originally built with substandard piping and has been limping along for many, many years. It would be nice to get a new water system, but is that the smartest decision for the community? Would we be better off fixing our current system gradually, or is it really time to build a new one. It is almost always less expensive to repair than build new. It's kind of like buying a new car or keeping and repairing the one you have. You can be in a catch 22 where the repairs are more than the worth of the car but there is no way you can afford a new car payment. You keep fixing up the car you have until you can save up to buy the new one. The answer is NOT to get a loan with payments you can't afford in order to get a new car. Building a new water system seems like an intimidating prospect. The community wouldn't have to worry constantly about the frequent breakdowns. Repairing one thing doesn't guarantee that another breakdown won't happen down the line. If you build a new system, you'll have dependability and less major repairs. However, the consequence of this is higher water rates and higher taxes. Our community would be literally chasing away limited and lower income people. The realtors, developers and local business' would benefit from the revenue created by the turnover of properties created by lower income people leaving this area because they can't afford it. Everyone seems to have an opinion on whether to continue to repair or whether to build new. Building a new system might seem like the best solution over continual repairs, but due to the consequences higher property taxes and higher water rates it isn't the best financial decision for the majority of the community.

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Pam Mason 1 year, 8 months ago

At the Saturday March 23rd Town Hall meeting facilitated by Supervisor Martin, it was made very clear to the board that the public wanted more openness and transparency. Many of the attendees were our neighbors that can only be available to get to meetings on the weekend. So what does the board do? They schedule the Proposed FY 2013-14 Budget meeting for Thursday, April 25th. The board themselves said that 60% of their tax base comes from part time residents, yet they don't make it any easier for those residents to attend and give their input.

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