April 25, 2010
Genesee Water & Sanitation District Customers
Re: Capital Replacement Funding
Your Board of Directors
approved a Strategic Capital Replacement Plan several years ago as
an adjunct to the District’s Strategic Plan. The Plan provides
phased replacement of aging equipment and infrastructure, key
elements of which are approaching 40 years of age. These
improvements are needed to assure that you will receive reliable
water and wastewater service for years to come.
Two years ago the voters
of the District approved a 3 mill levy within the real estate tax
structure to fund approximately one half of the annual requirement
for Capital Replacement related expense. The ballot explained the
District would work to obtain the remainder through rates and fees,
cost reductions and the pursuit of other revenue sources.
Your District staff and
Board are working to hold down its cost of operations. The 2010
operating cost budget was designed as a “no-increase” from 2009.
Given the current slow real estate market and the fact that the
District has sold only two taps in the past 5 years, we cannot count
on this potential revenue source to meet our unfunded Plan
obligations.
A recent survey of
residents included a District forecast of as much as a $20 per
month, per user fee requirement to meet the unfunded portion of our
Strategic Capital Replacement Plan requirements. The survey
responses clearly stated additional taxes should be avoided and that
trying to sell modest numbers of additional water and sewer taps or
increased service fees were the preferred funding sources, if
required.
After review of the survey
results, the Board considered a recommendation from its Finance
Committee that fees be raised $14 per month versus the $20 estimate
provided within the survey. This recommendation was based on a
line-by-line refinement of the Capital Equipment Replacement Plan
over the next nine years. Since the District has in progress other
revenue generation possibilities and has underway a detailed cost
containment program, the Board decided that effective with the
billing cycle commencing June 26, 2010, a Capital Replacement Fee (CRF)
of $7 per month ($14 per 2-month billing cycle) will be added to
each customer’s bill. The remaining $7 monthly requirement will be
sought through expenditure refinement and pursuit of other revenue
sources. If these are not successful, the District may have to
revisit the adequacy of the $7 fee. Equally, should these other
options reduce requirements; the Board will consider reducing this
fee.
It is the goal of the
District to insure a safe and reliable water and waste water system
at an economic and efficient cost to its customers. Replacing aging
infrastructure is key to this as is the importance of our ongoing
cost reduction programs.
Genesee Water and Sanitation District Board of Directors,
Scott Mefford – President
Tim Collins – 1st Vice President
Bruce Strand – Secretary / Treasurer
Gary Anderson – Vice President
Thaddeus Spack – Vice President
