By John Perry
Contributing Editor John Perry is a 23-year resident of San Juan Capistrano. During his career as an Assistant Superintendent of Business for large OC school districts, John was responsible for district fiscal management and operation, including budgets in excess of $100 million. John earned a Bachelor of Science from Cal State Long Beach and a Masters of Science in Education Administration from USC.
In what appears to be an attempt to defend the high cost of producing “our own” water, the City recently mailed a full color, glossy brochure entitled “The Value of Water” to all residents. It cost the taxpayers of San Juan $6000 to design, print and distribute, when it would have cost far less to include it in the water bill. As I began to read it, I realized that this “newsletter” misleads residents into believing that we are fortunate to have “our own” water supply to provide the City with water in time of drought or earthquake. The City suggests that neighboring water districts would not have this same “reliability” if they relied on imported water, and that our rates are comparable with those of other cities. But the documentation I’ve read says otherwise. Let’s examine just a few of the more egregious claims.
“Investments” in groundwater
City Claim #1: “…our own groundwater supply… is a unique opportunity to control our destiny, protect our economy, and enhance our quality of life….we’ve tripled our production in recent years, now producing more than fifty percent of the water you receive annually.”
FACT: The City has spent, not invested, $45 million taxpayer dollars on a groundwater facility that it doesn’t own. It is owned by the San Juan Basin Authority, but the City (you) paid to build it, then lease it, for 35 years. The company hired by the City to design and build it guaranteed a production level that has never been consistently met. Rather than make them live up to their contract, the City Council allowed the company to walk away from the contract, cancelling all guarantees and warranties. It has cost ratepayers millions in upgrades and repairs that would have been the responsibility of the company. Recent reports state that there is far less groundwater in the basin than believed.
“Investments” in recycled water
City Claim #2: “Recycled water for irrigation is more cost-effective than using drinking water...”
FACT: Recycled water is more expensive than imported water or locally produced groundwater because state law requires a segregated plumbing system so recycled water can’t contaminate drinking water. The cost of digging up streets and installing new infrastructure to deliver it to users is extremely expensive. All City domestic water users are forced to subsidize the cost of recycled water – regardless of whether the recycled water is actually delivered to their neighborhoods or homes. Prop 218 holds that a City utility can only charge its users for a service if they’re actually receiving it. This is one of the factors of the pending Capistrano Taxpayers Association (CTA) lawsuit against City water rates.
State and Federal Grant Funding
City Claim #3: “The City has secured more than $5 million in grants to support its water reliability investments.”
FACT: While City officials may behave as though money grows on trees, the truth is that grant funding is OUR TAX DOLLARS and is a prime example of why Federal and California Governments are more than $17 Trillion in debt. Debt increases our cost of living, and must be repaid by our children long after the groundwater facility is just a bad memory.
“Keeping water rates as low as possible”
City Claim #4: “…rates are on par for our region when compared to nearby water districts.”
FACT: The City currently produces about 50% of its water from local sources and purchases 50% from MWD. By comparison, Santa Margarita purchases 100% of its water from MWD and has rates 41% less expensive than San Juan for the average small lot user. In its 9 years of operation, the water plant has failed to produce water at a price competitive with imported water. One of the primary expenses is the cost of City salaries and benefits; the Utilities Department has 21 employees at a cost of approx. $2.4 million per year. The annual increase in labor cost for the water plant from 2011-2012 was 9.3% with an annual average total employee compensation of $129,860 (an hourly labor rate of $62.50).