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OID Directors Consider Rate Hike

POSTED October 16, 2012 8:06 p.m.

A discussion on setting water delivery fees for 2013 came before the Oakdale Irrigation District Board of Directors at their regular meeting on Oct. 16.

OID General Manager Steve Knell acknowledged that OID was fiscally healthy, stating that it had $44 million to $45 million in the bank, but added that expenses are going up and income has been going down. He said that every time OID doesn’t raise water rates, the expenses of the district still don’t change. He said the money has to come from somewhere and it has been coming off of Tri-Dam revenues but Tri-Dam also isn’t generating as much money as in the past.

“We are at the point of looking at a rate increase,” Knell said, also noting legal costs and other pending expenses.

Tri-Dam’s operating expenses are 14 percent to 16 percent per year, OID’s are at 6.6 percent and South San Joaquin Irrigation District’s (OID Tri-Dam partner) expenses are at 6.9 percent per year.

Director Jack Alpers said that with reserves dropping and expenses increasing that OID is left with one area to look at and that is taxes.

“The time has come we have to add a little to the water rates…small increments,” Alpers said. “…We need to raise the water rates. It doesn’t have to be substantial, maybe a buck, somebody should study it.”

Director Al Bairos said that he thinks OID shouldn’t do anything rash at this time and wait until the dust settles with Tri-Dam negotiations for power. He also said that taking a look at cutting expenses would be worthwhile and suggested that OID’s attorneys keep fighting and are keeping jobs for themselves going. He said he’d like to look at other areas before raising rates.

Director Hank Doornenbal acknowledged points from both Alpers and Bairos, stating that he’d like to wait until the dust settles and that he’d hate raising water rates, especially on the dairyman right now. He noted that OID’s water is worth more than $20 per acre but doesn’t want to go back to the old days of OID when the rates were among the highest in the state.

Bairos later added that OID has been pulling from reserves for two years and if they have to pull for a third year, then they should raise the rates but he wants to wait for now.

Alpers said he thinks OID should be proactive this year but conceded to Bairos.

Director Frank Clark said that raising rates would come out of the local economy and said he was with Bairos on the issue. He added that the more OID goes backwards financially, then it loses momentum and that it needs to transfer water.

Director Steve Webb also agreed with Bairos about letting the current rates ride for another year but said OID may eventually have to raise rates.

Alpers chimed in that it takes courage to raise rates, especially when it’s unpopular with constituents.

Farmer John Brichetto commented that dairyman can’t afford a rate hike and said that OID can’t compare its water rates to other districts, inferring that it’s an unfair comparison.

Rancher Ken Kraus said he has issue with raising rates because Tri-Dam is like a whole separate entity that operates independently, spending money and then asking for it to be approved and that the issues between OID and SSJID regarding Tri-Dam need to be addressed. He said that until the Tri-Dam issues are settled, he doesn’t see how water rates can go up as long as the trouble exists between the districts, further adding that too much money is being spent on Tri-Dam.

The next regular joint board meeting for the Tri Dam Project will be at 9 a.m. on Thursday, Oct. 18 in the OID boardroom, 1205 East F.

During public comments at the start of the meeting, Knights Ferry resident Dolly Haskell said that she believes it’s inappropriate for OID to send a water invoice to private residents of Knights Ferry. She said she wrote two letters to OID staff about the matter and got a “history lesson” in response. She said that residents of Knights Ferry pay the Community Services District for water and services and that OID and the CSD need to work out the issue. She added that in the 50 years her family has had their land, OID has never notified or attempted to collect a toll from Knights Ferry residents. Haskell added that she did not get a letter ahead of the bill, just the bill.

OID provides the water to the CSD and the CSD treats the water. OID director Steve Webb stated that OID had rescinded the late penalties for the bill, which is $5 per year, at the last meeting. However, the fee issue isn’t going to go away. Webb also said that OID pays for the pump in the river and its maintenance to supply the water. Director Frank Clark said, speaking for himself, that OID could’ve handled the issue better. It was also stated that OID was “lax for a while” in not collecting a fee and that OID was advised by its attorney to start charging everyone in Knights Ferry following the conclusion of the lawsuit between Knights Ferry water users and OID. Director Bairos suggested the OID bill the CSD and let them handle the billing to residents, plus OID would save money on stamps. Clark said that the OID domestic water committee will arrange a meeting with the CSD to discuss the matter, which is a public meeting.

The next regular meeting of the OID Board of Directors will be at 9 a.m. on Tuesday, Nov. 6 in the OID boardroom, 1205 East F.

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