Court rules "tiered" water billing illegal

By John Perry and Kim Lefner 

In another “I told you so” moment, the Capistrano Common Sense learned that the Second Appellate District Court appears to have confirmed our suspicion that the manner in which we are billed for water is punitive and therefore violates the law.

The recent Court ruling held that the Palmdale Water District’s “tiered” water billing structure does not comply with Proposition 218. San Juan Capistrano has a similar tiered billing structure as Palmdale in that it punishes consumers for exceeding their monthly water allocation by charging significantly more for each progressive “tier” (amount of water consumed), rather than basing it on the actual cost of providing the service.

Timothy Bittle, Director of Legal Affairs for the Howard Jarvis Taxpayers Association told the CCS,

“This type of structure violates Proposition 218 because the service provided doesn’t reflect the actual cost to the City of providing the service.”

Our City’s four-tiered structure appears to be focused on generating additional revenue for the City while conserving water.

CCS Board members began questioning the water billing structure in 2009, when the City proposed raising water rates by 40%. Unfortunately as is often typical of our City Council and staff, our concerns were simply dismissed and our water rates have continued to automatically increase every year, per the Council’s direction. 


CITY/base rate

1. SAN JUAN CAPISTRANO - $3.32/ccf

2. SAN CLEMENTE -$2.40/ccf

3. EL TORO - $1.91/ccf

4. SOUTH COAST - $1.91/ccf

5. SANTA MARGARITA - $1.89/ccf

6. MOULTON NIGUEL - $1.38/ccf

It may take a taxpayer lawsuit to resolve the issue of punitive tiered water rates vs. actual cost of service. CCS will keep you informed as the City tries to find a way around what appears to be this latest violation of Prop 218.

Editor’s Note: Are your water bills too high? We want to hear from you! Please email us at: .
The good ol' boys ride again


Last Tuesday the City Council selected a new Mayor for 2012. The debate was a disgrace; the illusion of fairness slipped to reveal the real power structure that controls our town. To everyone in the room it was obvious; standing in the back of the chamber was ex-Sheriff Brad Gates, close friend and ally of the Rancho Mission Viejo Company, who by all appearances calls the shots in San Juan to Councilmen Allevato, Kramer and Taylor who respond.

Larry Kramer did not distinguish himself when he engaged in a shameful charade to cause himself to be chosen as Mayor. By any criteria (tradition? experience? previous commitment or even simple fairness?) it was Councilmember Laura Freese’s turn to become Mayor. Indeed, last year, newly elected Councilman Larry Kramer publically promised to support Councilmember Freese for Mayor, as he was then displacing her as Mayor pro tem. Yet, he put his past promise aside and moved with iron-fisted determination to deny her due, with nary an apology. So much for integrity.

It was embarrassing to behold. Even residents who previously supported Kramer were ashamed of him, including many women who view this action as sexist. A comment from Abraham Lincoln came to mind; “Everybody is able to bear misfortune reasonably well but, to judge the true worth of a man’s character, give him power”.

Sadly, Larry Kramer does not measure up.
Refunds due for overcharged trash fees

By Clint Worthington 

Occasionally persistence pays off. After initially questioning City council and staff in 2009 about trash fee increases that appeared higher than what the contract allowed, City staff just recently examined trash hauler CR&R’s franchise agreement and found that CR&R had indeed erred in their calculations, resulting in over-charges to their customers.

City staff said they expect to receive CR&R’s new calculations within the next several weeks and is working with them to include the refund on the next quarter’s billing.

Setting aside for a moment why it took ordinary citizens to point out contract errors and why it took so long for staff to investigate, another issue has arisen about CR&R’s contract. CCS has learned that CR&R has had this exclusive contract since 2002 and has never been required to bid on it. If our understanding of the contract is correct, it automatically renews annually – with a 5-year requirement for notice of cancellation or revision! Obviously this clause severely limits the ability of the City to revise, re-negotiate or even to re-bid the service.

This means few, if any service providers will bid on service 5 years in advance.

CR&R’s contract has never been put out to bid and automatically renews annually – with a 5-year requirement for notice of cancellation or revision!

This is unfair to City taxpayers and must be corrected. The required action is for the City Council to give a formal notice of termination to CR&R in January 2012.
Part Two: The Ground Water Recovery Plant

By John Perry

This is a continuation of a 4-part series of the history of the Ground Water Recovery Plant.

The idea for the Ground water recovery plant ( “GWRP”) seemed to originate in the early 1990’s with the Metropolitan Water District (MWD)’s offer to pay a $250 per acre-foot subsidy for locally generated water from an unused source. The San Juan Capistrano Basin Authority (SJBA), city staff, and City Council members believed the calculations from the City–hired water consultant that showed the City could clean up the brackish ground water by building a facility capable of processing 5.1 million gallons of water per day. This would allow them to deliver 4800 acre-feet of clean water per year at a cost just over that being charged by MWD. 

In 2004, Cindy Russell who was then SJC’s Director of Administrative Services and Assistant City Manager said, ”…we need to generate more sources of local water here. This city has an ace in the hole, a huge untapped local source of ground water. The catch is that this plentiful source is too brackish to use as it is, so the issue is how to capitalize on the water most effectively.”

A Capistrano Valley Water Commissioner who served from 1996 - 2004 remembers the backroom negotiations the City had with the Rancho Mission Viejo Company that supported building the GWRP in order to free up basin water allocation for its 14,000 home planned development east of town. The Ranch development was then under consideration for approval by the County of Orange but,

...[the Ranch]  needed to demonstrate that they had the water allocation to service such a large development. If our City could produce more usable water, it would free up a larger allocation to service the Ranch’s development (at least on paper).

The problem was that the City needed to have water rights to 5400 acre feet of raw water to produce 4800 acre feet of finished water per year to meet its goals. Thus, in October 2002, then-City Manager George Scarborough presented for approval a SJBA Project Implementation and Operating Lease Agreement to the Capistrano Valley Water District Board (controlled by the San Juan City Council). The SJBA agreement provided expanded water rights throughout the lease period to enable the City to construct and operate the GWRP.  
The terms of the Agreement with SJBA are astonishing; the City agreed to lease the project from SJBA for a term of 30 years, with a renewal option for another 20 years. For the first 30 years of the initial lease, all costs of the GWRP are borne by the rate payers of San Juan Capistrano, including the initial construction cost of $32 million. 

It is costing the City’s water ratepayers $2.7 million per year to repay the bond debt until 2035 when the bonds will be paid off. It costs us an additional $3.5 million per year in personnel costs to operate the plant. This does not include maintenance costs, which have amounted to millions more than what was anticipated.

At the end of the lease period, the SJBA will own the GWRP, the City will lose control of it and its water rights will revert to the original 20% of the basin according to the City – Council approved 2010 Urban Water Management Plan prepared by water consultant Malcolm Pirnie.

Under the terms of this Lease Agreement, the City ratepayers will have invested more than $100 million dollars (estimated to be as high as $138 million) in the GWRP only to see control and benefit revert to the SJBA.
I simply cannot understand what the City Council was thinking when they entered into this extremely bad deal.

This is only the beginning. Stay tuned for the upcoming installments; “The Middle Years - 2005 to 2008, and “The End - 2008 and beyond”.

What our readers are saying...

The following are excerpts from recent emails we received from CCS Readers:

Without patriots like you, our city and others will continue to abuse and make stupid decisions that others will pay for long after the city managers have left... Please try to keep up the great work! “ 
- BR, SJC resident

I just wanted to thank you for looking out for us here in San Juan. Your news letter actually answered two questions I had concerning “ the ranch “ and my outrageous water bill! I am really glad there are people out there like you all who take the time to attend meetings and keep the “ good ‘ol boys” in line...or at least let them know there being watched.
KI, SJC Resident

Keep up the good work and effort to keep us informed.- BC, SJC resident

Thanks for keeping us informed about what our city council & staff are doing. This is news I’m not getting anywhere else.CB, SJC resident

Keep your trash off my porch!- Anonymous

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