Sierra Madre Water – What’s it all about?

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In an ongoing series, the Sierra Madre Weekly is hoping to get some answers to some tough questions regarding the water rates, conservation efforts and separate fact from fiction.

In an effort to do this, we asked every council person some tough questions: Thus far, only John Capoccia has responded: The following are Capoccia’s responses to our questions.
We will publish the other comments as they arrive. City Manager’s comments hopefully will come later in the week.

What are people REALLY mad about in town when, in comes to Water rates and the new restrictions?
I haven’t had much feedback regarding water rates, we have yet to complete the water rate study and thus haven’t made any proposals regarding new rates, so it hasn’t come up very often as a topic in conversations with my constituents. I imagine that our citizens will be upset that rates are increasing again, no one ever likes increasing rates. You’ve heard some of the things that people are upset about. Here’s a short list:

Bond debt – Why is are debt so high?
Leaky infrastructure – Why can’t we fix the pipes?
Mismanagement – There are accusations that that water department revenue is funding other activities (This is false)
Regarding water restrictions, most of the complaints are regarding “fairness”. Those that have been conserving are upset that they have to reduce as much as someone who has not necessarily been frugal. Those with larger properties feel it’s unfair that that they have to cut back when some with small lots are under the 17 ccf threshold. There are many more examples.

Many were upset by the first go-round, where we calculated individual targets using the customer’s entire previous year as the base. This has been mitigated by using a summer and winter average instead. Many were upset about the water restrictors and the threat of being cut off. This was also mitigated. Some were upset by the fact that this caught them by surprise. Some felt that the fines were a scheme to increase revenue (the math certainly doesn’t support this theory). I’ve also heard that this crisis was contrived by the city government to help justify the rate increase – Not true! I’m speaking for myself, but I’m sure staff and the rest of the council would agree that it’s hard enough to run the city effectively, much less overlaying elaborate schemes such as this. Even if I was inclined to participate in such a nefarious plot (which I’m not), I’m simply not that clever.
I do want to state that in my experience, most of the conversations I’ve had about water were not complaints, but questions from our citizens wanting to understand the situation. I also want to state that the vast majority of people that I’ve talked to felt that they would be able to comply with the cut backs.
Is Sierra Madre on verge of bankruptcy?
Answer: NO, but the water enterprise is financially in trouble. We are are slowly depleting our reserves.
Is the city misleading the residents about the water situation?
Answer: Absolutely not.
When and how will the water rate be increased?
Answer: This has yet to be decided. There will be public hearings on the matter, but it’s imperative that we get the water enterprise back on a track to financial stability as soon as possible.
How do they compare with Arcadia’s rates?
Answer: Our rates are higher. I have opinions about why that is, but I don’t think it’s appropriate for me to speculate. It should be pointed out that Sierra Madre’s rates are lower than many of our neighbors. Arcadia’s are the lowest in the SGV I believe, but I have not studied it. I did notice that Arcadia was reporting a substantial deficit in their year end financial statement for their water department, but I don’t know the circumstances. It may be related to a one time project or it could be more systemic. I believe that they are also undergoing a rate study for the purpose of increasing rates, but I can’t verify that.
Is the city co-mingling these two?
NO. Our Comprehensive Annual Financial Report (audited) has shown that our books are clean.
Have any repairs been done on the aging infrastructure which total over 300 leaking pipes underground in the city? What is projected water loss from these leaks?
Answer: I’ll let Elaine elaborate on this.
A 2010/11 water report stated that Sierra Madre:
“Collectively, the City should have a reliable source of supply over the next 20 years under single year and multiple year droughts”.
If this is so, why are residents having to consider new taxes and water rates increase? Possibly a huge rate increase, with combined UUT.
That statement refers to the water supply, not to the department’s financials. That section of the report also alludes to the steady decline of the East Raymond Basin, which reached a critical point this year. The decline was accelerated by the lack of rain. The City Council and Staff declared this a high priority in our first strategic planning session after last year’s election.

Bruce Inman has said the annual cost to import water is approximately $115,000.
. The $115,000 will be partially offset by savings because we won’t be pumping as much water from our wells. But yes, the water department will take a hit as a result of the need to import water, and the extra cost won’t be offset by the fines that are levied.

1. What were the bond funds used for?
2. How much is the bond?
3. What is the bond repayment plan?
Answer: These are outlined in detail in the CAFR, Elaine ( City Manager ) will elaborate.
Could you please:
1. Outline exactly what the scope of the infrastructure problems are
2. The assessment of how to deal with the problems
3. The projected cost of addressing the problems and the subsequent water savings associated with addressing the problems
4. How many wells/ vertical and horizontal does Sierra Made have?
Answer: Again, I think it’s best that Elaine answer these. In general, we know what the infrastructure problems are. These were presented in a staff report to the City Council, it’s a matter of public record. How to deal with the problem is a challenge. It’s really a matter of how fast we want to do it, because it’s well understood that the citizens of Sierra Madre don’t want to fund an extremely aggressive replacement program. We’ll vet this thoroughly at the public hearings on the water rates.
I do know that we have four vertical wells and two horizontal (tunnels) wells.

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