The Beaumont-Cherry Valley Water District will not increase compensation for its board of directors this year due to an economic downturn from the coronavirus pandemic, despite a split vote.
At a regular meeting on May 28, the district’s board of directors considered an ordinance to enact a pay increase for board members.
General Manager Dan Jaggers said this ordinance was an opportunity to increase the board’s per diem compensation from $200 per day to some higher number.
On October 9, 2019 this item came before the board with a fully burdened per diem analysis.
To which, the line item in the 2019 budget was increased by $7,800 in anticipation of this raise being approved, and it had been posted openly and in public meeting for well over eight months.
However, in April, Ordinance 2020-01 was tabled for consideration in May due to the Covid-19 pandemic.
About 48 written public comments were sent to the water district prior to the May 28 meeting indicating opposition to a raise for the board of directors.
Cherry Valley resident Sharon Hamilton expressed in a written public comment that she did not think a raise for anyone is in line right now. “Many ratepayers have economic uncertainty with lost jobs and price increases,” she said.
Hamilton also pointed out that water rates were just raised over the next five years.
Also in opposition of the increase in compensation was resident Glen Stull of Cherry Valley. In a written statement he pointed out that California is in total crisis with a $54 billion deficit due to loss of revenue and tremendous expenses.
“People are watching and are unhappy with leadership,” he said.
He suggested the board of directors step back and move with extreme caution.
Dr. Blair Ball of Cherry Valley said in a written statement that he appreciates the work of the directors but reminded the board that $260 per meeting is in the high range for a district of this size.
“It is difficult for Beaumont-Cherry Valley Water District to compare themselves with Desert Water Agency, which has three times the workforce, is a wholesaler and retailer and sewer district,” he wrote.
He continued, “COVID-19 puts everything in disarray. Unemployment is up and the economy is uncertain.” Ball asked the board to forgo the 30 percent pay increase because it is sending the wrong message to the community.
Quite a few residents tied the board stipend issue to the rate increase recently passed, to which President John Covington said the rate increase was overdue.
Covington explained that the last time the board did a five-year rate survey was in 2010. “The district should have been looking at a new rate survey in 2013 or 2014,” he said. “The district went eight years without raising water rates.”
Covington also explained that the California Water Code allows public agencies to adjust elected officials’ meeting stipends no more than 5 percent on any given year and to limit payment to no more than 10 meetings per month.
Covington noted that there are no board members who attend ten meetings per month.
However, Ball pointed out in his written statement that although this board of directors has been conservative in meeting attendance, the next people who come on board would have a precedent for the future. They may look at this as a job and want to attend as many meetings as they can, which puts them into a $31,000 per year job.
“That is not wanted,” Ball said.
Covington said district records show the board of directors did nothing with this issue for 10 years even though the district’s policy clearly states that this issue is to come before the board for consideration every year in October.
“It is the inaction of previous boards which has led to this point,” Covington said. “Compensation could be increased as to high as $320 per day of service.”
Director Lona Williams said with the current status of the economy she wanted to allow ratepayers to get their bills, especially during the summer months, and see how things are going. She felt that the item can be revisited, and merited or not, she would be more comfortable looking at it again at the beginning of 2021.
Covington retorted with whether the board takes action on this or not, the ratepayers will not be affected, as it had been budgeted in the 2020 operating budget.
Director Daniel Slawson said that he believes COVID-19 should not be part of the discussion and the stipend has not been raised in 13 years.
“Research was done to assure this is level with other boards,” he said.
He also agreed that elected directors should not be only wealthy people; everyone should be able to participate and without compensation some may not be able to. He pointed out that in the past, vacancies were difficult to fill.
Covington said the board should look at this every October and at a minimum adjust for cost of living. He added that absent of the COVID-19 crisis, the board would be moving forward with the raise, and he felt confident in doing so.
The board ultimately voted 2-2-1, with President Covington and Director Slawson voting yes; Directors David Hoffman and Lona Williams voting no, and Director Andy Ramirez abstaining.
The board also heard a report pertaining to the Beaumont Master Drainage Plan Line 16 pipeline relocation project.
At the April 23 meeting, district staff identified that there are additional improvements needed and those improvements would need to be completed by BCVWD.
There are four segments of waterlines of varying size that will require relocation to facilitate the construction of MDP Line 16 Storm Drain main line, laterals and inlets (which are catch basins – their sole function is collect rainwater from streets and parking lots and transport it to local waterways through a system of underground piping).
The replacement in pipeline is to replace the existing six-foot steel piping and replace it with eight-foot ductile iron pipe, DIP, which is the district’s current minimum standards.
Jaggers said the projects would be funded using a combination of facilities fees (capacity charges) and capital replacement reserves.
And even though the 3,245 feet of pipeline is shown in the Capital Replacement spreadsheet in the 2020 budget, it is a project that the district will not be able to get done in time, said Senior Engineer Mark Swanson.
The holdup is due mainly to the county requirement that the district re-pave half the street, but with the storm drain line going in, it is not something that can get through California Environmental Quality Act to complete the entire line.
Swanson said that project plans at the 60 percent design level were approved by the Riverside County Flood Control and Water Conservation District and BCVWD.
Flood Control wants plans approved by the board by September so construction can start early next year, Swanson said.
Which means, the district will have to accelerate addressing these pipelines.
Jaggers indicated that a conservative cost estimate has been done, where the district hopes to acquire savings through economies of scale by bundling projects.
The fiscal impact of this project is estimated at $431,464.09.
The staff outlined two options for the board to choose from: option A does not allow for any additional costs that could occur and the cost structure is not to exceed the above figure.
However, option B allows for 15 percent contingencies for contruction related costs and 20 percent contingencies for additional soft costs related to the project.
Option B is not-to-exceed $496,703.15.
The estimated costs are for design, constuction and administrative services.
Costs associated in the option B estimate assume that additional geotechnical studies will be necessary.
Also contingent on how quickly the decision is made is a grant for the storm drain project, which has a sunset date in December 2021.
A swift decision assures the district’s pipelines are not impacted by the storm drain project.
Covington responded with concern about an agreement on which the board provided comments in 2016 or 2017 and is not yet complete despite a half million dollars in proposed pipeline work.
He also pointed out the replacement of 3,245 linear feet with DIP and other segments along Grand Avenue and suggested this project not be done in a piecemeal manner; and also noted potential California Environmental Quality Act necessities.
Covington said he is not comfortable putting additional money on the table until there are signatures on the agreement, but that he is otherwise in support of the project.
Jaggers reminded the board that there have already been cost increases in the storm drain project, and the pipelines are also things that need to be done.
Some of the items are already-planned projects, he said.
Staff's recommendation, Jaggers said, is option B.
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