A troubled water and sewer district near Lake Berryessa is facing a daunting decision: approve a hike in its rates to balance its budget and escape the wrath of state water quality regulators, or risk going belly up and cease operating.
On Monday, residents of the Berryessa Estates on Putah Creek, north of the lake, gathered at the Pope Valley Farm Center to meet with the Napa County Board of Supervisors, which acts as the district’s board of directors.
Napa County manages the district, and estimates that residents will have to raise their water and sewer rates from an average bimonthly bill of $359 to $602. The rate increase is being decided with a districtwide vote, and the ballots are set to be tallied June 4.
Many residents expressed displeasure at the rate increase and questioned if it would truly solve the problems that have plagued the Lake Berryessa Resort Improvement District for years. They also said the increase would be a crippling blow to residents who are already struggling financially.
“It’s kind of like the straw that’s breaking their backs,” said Garth MacDonald, president of the Lake Berryessa Estates Property Owners Association.
One woman predicted many people would walk away from their properties rather than swallow the rate hike, which would blow a deeper hole into the district’s budget. The district has 180 homes, with a little more than 160 active ratepayers. It has 20 parcels that are in judicial foreclosure, and another 50 parcels in delinquency.
“I love it up there,” said another Berryessa Estates resident. “All of these people love it up there. You’re witnessing the death of this community here. What you’re asking us to do makes no sense. You’re asking us to balance a budget that’s been sorely mismanaged over the years.”
Supervisor Mark Luce said the rate increase needs to pass to ensure the community has a future.
“We have really been working at wits’ end trying to get this district solvent,” Luce said. “We are at the point where we actually think there’s daylight at the end of this tunnel. You’ll have a viable district, which we haven’t had in a very long time. If we don’t do that, we’re in a deep, dark hole.”
The district needs to get in compliance with state water quality regulators because after periods of heavy rainfall it’s been discharging treated wastewater through spray fields, which reaches the lake —the main source of drinking water for Solano County.
That’s led to hundreds of thousands of dollars in fines from the Central Valley Regional Water Quality Control Board, and the possibility of more fines in the future looms over the district. It’s been hit with fines of $400,000, $360,000 and $595,000 in the past decade.
To get into compliance, the state requires improvements to the district’s wastewater system and a large expansion of its storage ponds, from 7 million gallons to 27 million gallons, which is estimated to cost slightly less than $5 million. That will ensure the district could withstand a 100-year rain, with 60 inches of rain falling over a short time, and not discharge, District Engineer Phil Miller said.
The district may be able to obtain grant funding from the U.S. Environmental Protection Agency for this, but first it needs to balance its budget, Miller said. The EPA money is disbursed by the state of California, and Miller said it’s currently available; the district would qualify once it balances its budget.
“If we can’t provide a balanced budget, it’s dead on arrival,” Miller said. “We haven’t been able to identify another source. This EPA program is the best deal.”
Miller said the continued fines from the regional board would be a worse scenario.
“If the citizens aren’t willing to vote to allow the rate increase, then the regional board is going to show no pity on us,” Miller said.
Napa County has lent the district $1.69 million over the last several years, with an expectation that the debt would be eventually forgiven. Supervisor Diane Dillon said Monday that this may be problematic. A recent opinion from the Napa County Counsel’s Office said that forgiving the loan could run afoul of California constitutional provisions and may constitute a gift of public funds.
MacDonald questioned if the district’s books would be truly balanced even with the rate increase, especially if it has to make loan payments to the county.
“The budget’s not balanced because you don’t factor in the payments,” MacDonald said. “What about the loan payments?”
Supervisor Bill Dodd pledged to give the district maximum flexibility if the loans have to be repaid.
“I know this board will be absolutely as creative as possible on that issue,” Dodd said. “That is an absolute commitment. That is my commitment.”
Dodd said he, Supervisor Keith Caldwell and staff have been working with the regional board to have the fines reduced or waived, but it needs to see progress on the improvements first.
In 2007, the district approved a property tax assessment of roughly $1,200 per year that sold $4.8 million in bonds, which has contributed $3 million toward other improvements, Miller said. That includes repairing and rehabilitating the sewer line, improving the sewer lift station, and effluent disposal, among other projects. With federal stimulus funding, the district was able to build a new water treatment plant.
But it still needs the wastewater improvements, and the money left over won’t cover the full costs, Miller concluded.
Residents balked at the estimated costs, including a $500,000 engineering fee the county lent money to cover last year. That paid for the consultant to use previous studies to determine the appropriate pond size and design, California Environmental Quality Act work, and getting the project ready for financial planning.
“Engineering consultants are not cheap,” Miller said. “In the world of engineering, a half-million dollar design fee isn’t all that much.”
The project is finally ready for construction, but needs funding, he said.
Supervisor Keith Caldwell said the repair bill is long overdue, as the district is still operating parts of a system that are 50 years old. The Estates, he notes, was intended to have part-time vacation rentals and homes, not full-time, year-round residents.
“The system leaks like a sieve,” Caldwell said. “This is old pipe that should never have been put in the ground. You’re all here because you know there’s a lot at stake. There could be a very positive path forward.”