"The Value of Water" Newsletter - Spin or Fact?

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).

Guest Column - The Future of San Juan Belongs To You, Grasp It!

By Derek Reeve, San Juan City Council 

In 2009 the city of San Juan Capistrano put pen to paper and finalized what I have referred to as the worst real estate deal in the modern history of Orange County. San Juan Capistrano purchased 132 acres of Rancho Mission Viejo owned land which at the time was not even in San Juan Capistrano, all for the radically overpriced $27.5 million. It was justified under the bogus claim of preserving open space even though at least 40% of it was already preserved as such. The terms of the agreement read more like a lease agreement than a purchase agreement since much of the control is retained by the Rancho Mission Viejo Company, including its very name, the Rancho Mission Viejo Riding Park.

Nevertheless our community had to address what to do with this property now that we owned it. When I took office it became clear that no plan had ever been developed. Up to this time the city contracted with equestrian events promoter Blenheim EquiSports to lease this property so that they could profit from it. This lease is soon up for renewal (it has been renewed twice already since we purchased the property). Because of this lease the people of San Juan Capistrano are restricted from using the leased portion of our park despite continually paying for it through our property taxes. The amount of money generated by this lease is less than 10% of the annual principle and interest owed on the property. The company leasing the property, Blenheim, makes a handsome profit from the equestrian events they hold on our property while San Juan property owners make the “mortgage” payment and are prohibited from using it.

In my opinion, the status quo cannot stand. This is unfair to our residents. A plan must be developed to take back our park. That plan for our future park belongs in your hands. I propose a committee of ordinary citizens be established to develop a long term plan that would utilize the park in such a way that benefits the varied interests of San Juan Capistrano. Based on input I have received from my constituents, the park should include:

Reata Park – Whose Park Is It?

At the July 16 council meeting, despite receiving nine letters in opposition and none in support, Council members Allevato, Kramer and Taylor voted to approve the private Open Space Foundation’s recommendation to add its name and logo to the entrance monument at our publicly owned Reata Park. Council members Byrnes and Reeve voted no.

We received several letters from readers expressing concern about this issue. Due to space limitations we are only able to print one, which is listed below.

Letter to the Editor

After watching the video of the July 16 council meeting, I am stunned by the public comments made by certain council members!

There’s a strange pretzel logic that’s permeated the brains of certain council members…it seems to go like this:

· Convince property owners to tax themselves $30 million to buy “open space” in the City.

· Allow non-public entity to decide what to buy, at what price and on what terms, out of public view.

· Approve entity’s selection of a $27.5 million property outside the City limits (that just happens to be owned by a life-long friend of entity)

· Have council bless entity’s sovereignty by allowing all sweetheart aspects of the deal they negotiated to remain…despite the invitation by previous owner to re-negotiate terms of the deal

· Disallow citizens from any and all access to the park

· Grant entity exclusive access to park to construct what they want on our public property (including a monument to themselves)

· Allow entity to proclaim they’ve spent “hours and hours” working on park development to justify placing their name, and no others – not even the City’s - on the park signage

· Since so many hours have been spent on park, it’s theirs by default

· Entity is lauded by Council members. Councilman Sam Allevato shames citizens for doing “nothing at all” towards the creation and payment of the park !

Rules Should Apply Equally to All

By Clint Worthington

Contributing Editor Clint Worthington has lived in San Juan Capistrano for 28 years. He is a Board member of the Capistrano Taxpayers Association and for the past 21 years has been a volunteer firefighter with the Orange County Fire Authority serving the City of San Juan Capistrano. Following a 27-year career in the banking industry, he now enjoys his position as a locomotive engineer. 
The lawsuit involving the Forster Mansion two years ago shed light on the problem of selective code enforcement in our town. After twenty-two Municipal Code violations, the City had still done nothing to enforce the law against the event promoter who leased the Forster Mansion. It was not until a lawsuit was filed against the City requiring them to follow their own laws that action was taken against the event promoter.

Prior to that lawsuit, community members questioned whether the City’s refusal to take action was because City Councilman Mark Nielsen was friends with the event promoter. Whatever the reason, it opened my eyes about selective code enforcement in our City.

Unfortunately, it continues to this day. Recently, the private Open Space Foundation (“OSF”) placed their banner at our publicly owned Northwest Open Space. When asked what rules allowed this private group’s banner to be hung on public property, City planner Bill Ramsey stated there were no rules for placing banners at open space and therefore the OSF did not need a sign permit.

Following the OSF’s lead, the Capistrano Common Sense (“CCS”) placed a similar but smaller banner in the same location. Within 24 hours CCS received a “Notice of Violation”. The stated reason was that the CCS did not have a sign permit.
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