By John Perry
I‘m not opposed to the idea of making local water if it’s cost effective. But it’s not. Our water bills prove that making our own water costs too much, especially when we could purchase it from the Metropolitan Water District (MWD) for about half the cost.
The Ground Water Recovery Plant (GWRP) became operational in December 2004, and started producing drinkable water from a brackish water source beneath the City. The GWRP was designed to produce 4800 acre feet of water per year but has never produced its design goal.
This has forced the City to buy more imported water from MWD than planned and resulted in a loss of a $250 per acre foot subsidy from the MWD for locally produced water.
In total, the GWRP’s lack of output has cost rate-payers more than $15 million over the 8 years of operation.
The GWRP was constructed from bonds sold by the San Juan Basin Authority, which is leasing the facility to the City for 35 years. The total cost to build the GWRP was about $42 million ($78 million with interest). The annual bond debt payment of $2.9 million is paid by San Juan ratepayers.
The GWRP’s impact on ratepayers has been enormous. Water rates have increased 105% during the 8 years of GWRP operation. Despite the rate increases, the City incurred an $8.2 million deficit in 2011, most of which remains unfunded.
In 2010, the City implemented a tiered water rate structure that penalizes water users for exceeding City dictated water allocations. The City is also collecting $1.3 million per year in fees to pay for $18 million in bonds to expand the GWRP. The trouble is, those bonds were never issued because the City has insufficient reserves that are required to borrow money. The City cancelled the bond sale but continues to bill the ratepayers for it. A lawsuit is progressing through court to overturn both the tiered rate structure and the “Phantom bond” fees.
According to the City’s Utility Department, it costs about $1,400 to produce its own water when it can purchase water from MWD for $870 per acre foot. That’s an obvious waste of taxpayer money.