Knowing Where your Water Rates Go is Valuable

By Bob Fultz

I’d like to talk about a recent Facebook post by the San Lorenzo Valley Water District.  I’m a member of the SLVWD Board of Directors but am speaking only for myself.  

I’ve advocated for years that the District needs to communicate its true financial position as part of an overall communications plan.  Recently, the District published a financial chart on Facebook, which you can see directly below:

The pie chart in the District’s post (and above) makes it appear that a majority of the money you pay in water rates is spent on infrastructure. Unfortunately, this pie chart appears to combine revenue from water sales with large loans the District has rightly taken out to fund infrastructure—which is not standard accounting practice nor helpful for this analysis.  It is like saying that your paycheck and credit card debt are both income.  We all know that credit cards and loans are repaid from income, so the District’s pie chart data is not accurate.  But the idea of knowing where your rates go is valuable.

An accurate picture is posted below.  For the budget year June 2024 through July 2025, 11% of the money you pay to the District is used for capital obligations, like repaying the loans that fund infrastructure improvements.  An overwhelming majority of your water rates is spent on operations. This 11% is less than half of what it needs to be to keep our District’s infrastructure up-to-date. 

This next pie chart shows how budgets for the District since 2016 have grown at about twice the rate of inflation, while rates more than doubled.  You may remember, as I do, that the District said most of the money from the last two rate increases would pay for infrastructure. Unfortunately, that did not happen.  Instead, about 2/3 of the last two rate increases were used for general operations.  

It’s not clear that the most recent rate increase will be any different as the District and your Board of Directors have not made any progress to change their spending patterns.  That history shows us it is important that we make wise choices going forward, to help us get our District on the right track serving you with better financial oversight and fair rates.    Thank you.

Bob Fultz is a member of the San Lorenzo Valley Water District Board of Directors. He is a resident of Boulder Creek and CEO at Range Networks.

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