by Sandia Belgrade
A room full of residents came before the Baca Water & Sanitation Board at its November meeting to ask questions about the proposed budget, particularly as it affects mil levy and rate hikes. The board rearranged the agenda so that the 2014-15 budgets would be discussed first. While the back-and-forth questioning was done in a spirit of good will, it raised issues that the board and this community need to address.
Historically, the budget is about the balance of needed improvements to an older system, operations, payouts to a management team, and consideration for what the residents, many of whom are on fixed incomes, can afford. Rates continue to rise along with costs of long-term debt and many, like Lynn Drake, wondered whether there was a ceiling on fees and taxes or are they going to keep going up. Increasing them every year indicated to many at the meeting that better planning and alternatives are needed if people can afford to live here.
A County accounting error resulted in a windfall for local governments & special districts such as Baca Water and Sanitation District which got $131,881. Among the many questions that came up, residents wanted to know why that wasn’t being used to defray increases for the customers. Residents in attendance were dismayed to find that overall the district is only getting about $1,600 more/month and the entire amount is going into the reserve. Cindy Reinhardt, board president, explained that reserves are required by bonds and can’t be touched until loans are paid off. This a separate reserve; the reserve from the large payout is an emergency reserve and can be used for such. Prior to having a reserve, the district used a contingency fund. The reserve must be maintained, but when asked if the reserve just grows and grows, the board replied that they haven’t had this discussion before. (In comparison the POA has about $1 million in reserve and still raises fees.)
One resident’s quandary
Lynn Drake was open enough to use her situation as an example of how the situation is affecting residents. On a white board she showed the total of the assessed value of her house and the property tax. She feels her payout to W&S is disproportionate, amounting to nearly 1/3 of the tax amount. Now with rates getting raised again this puts Crestone and the Baca out of synch with the rest of the valley. Additionally, other mil levies like the library aren’t going up. Though Lynn is paying less now to the district than in 2011, the increases are a concern for her and others.
Kyle Grote stated the bottom line that many present wanted to know: just what will the increase be to customers? As of now, a $2 monthly increase this year. Many were also relieved to know that the mil levy is capped at 50 mils for operations, and that only 15% of our mil levy is unlimited and related to debt.
Addressing the increased costs
Exactly how the board is planning to address the increased costs, fees and taxes every year is something not known. Board President Reinhardt said, “Everyone shares your concern. We grapple with it every month. We don’t know all the solutions or how to cut overhead. That conversation is still happening.” Many residents feel that conversation needs to happen soon, especially in the form of long-term planning. Lisa Cyriacks said what many are thinking: “Increasing fees and taxes every year is an unsustainable stop-gap measure.” Implementing more cost-saving measures is necessary for stakeholders and is a step in the right direction, for clearly what has been done is not enough.
The highest costs to the District are staff salaries and benefits ($429,000). In addition to this the District spends a significant amount, potentially as much as $225,000, on Legal; $80,000, Management; $65,000, Accounting; $40,000, Engineering; $40,000 on consultants. Lisa Johnson and Lindsay Ross, retained from Special District Management Services (SDMS), led much of the discussion and went over line items that the audience had questions about and were very helpful. SDMS District Manager Johnson presented scenarios for controlling costs. These include reducing both operating costs and consultant fees, with more responsibility being shifted to the local staff and streamlining meetings. According to Johnson, “My primary responsibility is the District’s financial health, and a part of that health means reducing my fees and supporting the local staff to be confident in taking on more responsibility,” she said. Since the District spends a significant amount for SDMS, which is a large Denver-based management company, it is reasonable to reduce those costs.
A common theme emerging
Moira Forsythe asked, “What is the relationship or interface between the POA and Baca Water? Why aren’t funds that homeowners pay for maintenance and services conjoined? Why are there separate funds for everything?” She, like others, was responding to the glaring expenses our community pays for outside management: $330,00 in the instance of Water & Sanitation; and another amount towards POA management, Hammersmith. One person commented that we have qualified accountants and lawyers and can keep the money in our community.