New Water Source Offers Less Expensive Water


Our City Council has repeatedly stated that it must have its own water source because water from the Metropolitan Water District (MWD) is subject to conditions in the Sacramento delta, or drought in Colorado, or natural disasters; all of which the council claims “could” curtail the City’s water supply.

But now it appears we may have a new water source with great reliability. This source is the Cadiz Water Project in the California desert.

In October 2012, the San Bernardino County Board of Supervisors approved Cadiz’s plan to pump 50,000 acre-feet of water per year out of this vast water source in the desert near Amboy.

The new water source will supply over 100,000 Southern California households who have contracted to purchase Cadiz water at rates equal to or less than current MWD rates. 

This aquifer is thought to hold more water than Lake Mead (approximately 32 million acre-feet) and has an annual recharge of more than 32,000 acre feet from the nearby mountains. The water and snow fall percolates through the sand and gravel of the desert and is stored in an underground “lake” nearly 1,000 feet deep.

CTA Wins Round One in Water Rate Fight

The Capistrano Taxpayers Association (CTA) won a victory in its battle with the City to overturn water rates adopted by the City Council in February 2010. The City attempted to have the case dismissed on procedural grounds (statute of limitations) however, the Court overruled the City’s objection. Superior Court Judge Gregory Munoz will allow the CTA lawsuit to proceed to trial beginning June 17, 2013. 

The CTA lawsuit asks the Court for the following findings;

1.”The CTA requests…the Court [declare] the water rates illegal under Proposition 218.”

Proposition 218 allows Cities to impose taxes or fees based on the actual cost of delivering the service to customers. If the fees are not cost-based, the fees are in reality a tax. Taxes must be approved by voters in an election.

The CTA claims that the Tiered water billing is not cost-based, because Tiers 2 through 4 are actually penalties meant to punish water users for exceeding the amount of water allocated to them by the City. Since these fees are not cost-based, the fees are an illegal tax.

Editorial

It’s that time of year when many of us reflect on what we have accomplished in the past year, and what we might change.

We are pleased that the CCS has made a contribution to an honest and factual discussion of issues impacting our town. We saw those discussions play a role in the election, when 59% of the voters in San Juan voted against the status quo. The people now have a new voice on the City Council in Dr. Roy Byrnes, who was the top vote-getter in the election. While we predict the fiscally conservative council members Byrnes and Derek Reeve will continue to be outvoted 3-2 on most tax-and-spend issues, at least you will know how your tax dollars are being spent.

We understand that some folks down at City Hall don’t appreciate the CCS, especially when we are critical of their actions. Councilman Sam Allevato for example, called us the “Capistrano No Sense” from the dais last year. Sometimes the truth hurts, but in those cases we suggest that the one being criticized look to their own actions and not shoot the messenger.

“Self-Awarding” Has a Cost

By Clint Worthington 

I would have thought two years ago when then-Mayor Sam Allevato presented City staff with a “Project of the Year Award” from the American Public Works Association (APWA) for a job well done on intersection “improvements” to Junipero Serra and Rancho Viejo Road, that the City would have learned its lesson about accepting such empty platitudes.

As many residents know, that came back to bite them when the “award-winning” intersection improvements actually made traffic worse. The intersection was horribly designed and backed up traffic even more during rush hour, prompting many complaints from frustrated motorists.

When I addressed the City Council about receiving that award, I informed them that the APWA’s sole reason for existence is to hand out awards. In fact, every year since joining the APWA, the City has received an award, despite incredibly congested traffic (such as at the Del Obispo Railroad Crossing), yet not one year have they missed receiving an award. Not one.

The Government Finance Officers Association (GFOA) is another agency whose sole purpose it seems is to hand out awards. The GFAO recently presented the City with the "Certificate of Achievement for Excellence in Financial Reporting".

But what does this “award” really mean? Not much, it seems. According to a recent article  in the Orange County Register* (Jan. 17, 2013): 

“…the award does not measure fiscal stability. Instead, governments pay a national trade group to assess whether all the components of their budgets are in order. The review measures good looks more than substance.” 

According to the Register article, the “award” simply measures criteria such as; “Does the document contain a table of contents? Are all the changes from the previous year clear? Is the number of employees included? Are there any indicators to gauge a program’s effectiveness?” Seems to me the answer to the last question would have to be “no”.

The Ground Water Recovery Plant Wastes Taxpayer Funds

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.

Capistrano Taxpayers Association Files Legal Action Against City Over Water Rates

By John Perry

After several offers to discuss remedies were ignored by the City, attorneys representing the Capistrano Taxpayers Association (CTA)* filed a lawsuit against the City on August 29. According to attorney Ben Benumof of Wilcox & Benumof in San Clemente, the legal action, called a “writ of mandate”, asks the court for several findings.

Tiered Water Rates
The first is to find the tiered water rate schedule imposed by the City Council to be unconstitutional under the provisions of Proposition 218, which limits the fees Cities may impose. Under Proposition 218, the City must show it has based all fees for property-related services on the actual cost of the service. The CTA believes the tiered rate structure for Tiers 2 through 4 punish the water users for failure to meet City-imposed water allocations. The writ of mandate asks the court to invalidate the tiered structure unless the City can prove the structure is actually based on cost of service.

The Phantom Bond
Under the complaint, the CTA also charges that the City increased water fees to provide funding for a planned $18 million municipal bond sale. Water rates were increased in February 2010, by $1.3 million per year for 30 years, to repay the planned bonds. However, the City was unable to sell the bonds because of their lack of reserves so the bond sale was cancelled. But the City kept the $1.3 million per year in the rate structure to be used for other utility costs. Thus, ratepayers have been charged $1.3 million per year to pay for a bond that doesn’t exist (hence the term “The Phantom Bond”).

The CTA believes this action by the City violates the provisions of Proposition 218 because the City did not sell the bonds and did not incur the costs of debt repayment but instead used and is still using the money to fund other utility costs. The CTA asks the court to set aside the money in an escrow account to fund the bond whenever it is issued.

The final cause of action asks the court to compel the City to buy water for City residents from the least expensive available source. To do otherwise is an obvious waste of taxpayer money.

Since 2004, the City has operated the Ground Water Recover Facility (GWRP) that pumps water from underground and filters it to remove all of the contamination. The resulting purified water furnishes a portion of the City’s drinking water supply. The City also purchases drinking water from the Metropolitan Water District (MWD) to supplement the water supply. The MWD gets their water from Northern California and from the Colorado River.
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