Guest Opinion | Root cause of struggles at EWUA

||| FROM FRED KLEIN |||

Perhaps a bit of history from the point of view of a long time member and former board member of EWUA would be helpful for the membership to understand, confront and deal with the current chaos.

Once upon a time…for many years since its inception as far as I know…the rate structure for EWUA was pretty simple as it abided by the WA State-sanctioned method known as “Equivalent Residential Units” or ERUs.

A homeowner within the service area of EWUA who wished to have water service would purchase one ERU at a price determined by EWUA. Once a member, the homeowner would pay a monthly Base Rate which would include 5000 gallons of water, and if a homeowner’s water usage exceeded that number there was an additional charge per 1000 gallons.

The Base Rate was set to cover the cost of producing the water and maintaining the existing system. The money collected from the sale of ERUs was intended to be set aside to provide capital to fund expansion of the system. I’m unclear as to whether or not that allocation of revenue was strictly adhered to.

When a commercial user wanted to connect to the system, the application form asked for an estimate of expected water usage, a figure which was then converted into the requisite number of ERUs. Those ERUs were then purchased by the commercial
user and all was well.

A little over a decade ago, it became apparent that a couple of commercial users, either in their application for EWUA membership or under their existing membership, had significantly underestimated the volume of water they would be using; the consequence being that the commercial users had purchased far fewer ERUs than were necessary to support their high water usage…and…EWUA did not receive the funds anticipated with the then-existing rate structure.

These high-usage commercial members resisted requests to purchase additional ERUs to maintain the required balance between the number of ERUs held and the amount of water consumed…this was understandable given that the price of a single ERU was over $12,000.

Paul Kamin, the long-time General Manager, proposed…and the EWUA Board approved…a change in the rate structure whereby the charge for water usage beyond that included in the ERU base rate was raised significantly as an incentive for commercial users to purchase the proper number of ERUs. The EWUA Board then scheduled at least one workshop which was well attended to explain the new rate and the reasoning behind it.

Some of the high usage commercial members were unwilling to accept their responsibilities and later showed up at the EWUA annual meeting with plenty of proxies to defeat the re-election of incumbent Board members and essentially took control…Paul’s proposed changes to the rate structure were never implemented. And that was the end of my service on the EWUA Board.

The new Board thanked Paul for his service, wished him well in his retirement and, after a search for his replacement, hired the current GM who had recently departed Rock Island (internet provider) and had zero experience with or understanding of community water systems.The new hire did, however, have experience spending money on quite expensive non-essential equipment and decor, while giving away serviceable vehicles and buying new trucks, much to the concern of experienced EWUA staff.

After an extensive study by the new Board, the GM, and several community members, significant changes were made to the rate structure including the abandonment of the ERU system. I am not privy to the nature of the discussions leading up to the new rate structure. For residential members, the Base Rate no longer includes the monthly allocation of 5000 gallons of water. For commercial users, no additional capital contributions were required.

For a while, it appeared that the rate changes shifted some of the burden of system expenses from commercial users to residential users…but now…at least one commercial user I’ve spoken with complains bitterly about how his water bills have gone through the roof. Apparently all users are suffering from increased cost of water.

Some EWUA members question the degree to which the current board performs its oversight role as well as its setting GM compensation which has risen from $108K to $181K in five years. In fact, four years ago when the GM salary was set at $118K, the
GM wrote checks to himself in addition to his salary totaling well over $10,000 for which one Board member conceded to me, “…that was probably not a good idea.”

Administrative costs at EWUA rose again when the present Board  endorsed the GM’s desire to hire a high-priced deputy who has water system management experience as well as the demeanor and people-skills which he lacks but are essential to respect and retain the experienced workers who actually maintain the system. These dedicated folks have the technical training to meet the WA State Department of Health standards, and allow the community to continue to have a dependable, safe supply of water for its daily needs.

Most of the current EWUA Board members came on board after the hiring of the current GM. Some may not be aware that the primary mission of a member-owned community water system is to deliver safe, potable water at the lowest possible cost.

Despite numerous red flags raised by the membership and the resignations of valued EWUA staff, I’ve seen no signs that the Board is aware that something is amiss…