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6/02/2025 Existing Conditions Report Castlewood County Service Area (CCSA) 13 Future years’ rates were not increased to cover the higher annual costs in FY2023-24 (and the prior year) reported in the calculation of the supplemental charge (see below).41 These rates presume that future costs are at FY2024-25 levels (plus 3 percent inflation) without the “non-recurring” costs that caused fund balance deficits. Water O&M Supplemental Charge As a result of estimated Water Operations ending fund balance shortfalls, in April 2025 ACPWA proposed to add a “Supplemental Service Charge” of $829.72 per RDE, leaving other rates as established the prior year.42 The supplemental charge repays over ten years a County loan 43 approved in Oct. 2024 to cover an estimated $1.4 million ending fund balance shortfalls accumulated in FY2022-23 and FY2023-24. The supplemental charge would bring total water M&O charges to approximately $3,940 annually per meter/connection (if effective FY2025-26). The supplement is proceeding through the notice and hearing process .44 Water Capital Improvements CCSA recently replaced its old redwood tanks. The new tanks were funded by a loan from the State. When CCSA applied for the loan, costs were estimated at $1.5 million. CCSA subsequently obtained a loan for $3 million which was deposited to the Water Capital Fund. Annual repayment began in 2023. Combined principal and interest payments are $177,000 annually. Table 5 summarizes planned improvements. ACPWA met with Castlewood representatives in 2023 and discussed options for funding the improvements. To date, no action has been taken. The CCSA’s FY26 Annual Report also indicated a need to “replace the roof at one of the of the water pump stations” but no costs were provided.45 The 2012 Water and Sewer Assessment recommended CSA budgeting for water main replacement “...starting at 40 years in the event emergency repairs need to occur.”46 Approximately 90 percent of the system was replaced in 1996 and has a lifespan of about 100 years.47 41 Castlewood CSA R-1967-1 Engineer’s Report for Proposed Supplemental Service Charge, April 22, 2025, Table 2. 42 Castlewood CSA R-1967-1 Engineer’s Report for Proposed Supplemental Service Charge, April 22, 2025. 43 See ACPWA memorandum to BOS with attached resolution R -2024-484, Oct. 2, 2024. 44 FY26 Annual Report, 5/6/2025, recommending rates for FY2025-26. 45 FY26 Annual Report, 5/6/2025, recommending rates for FY2025-26. 46 2012 CCSA Water & Sewer Assessment. 47 2012 CCSA Water & Sewer Assessment.