More Water Rate Increases?
By Kim Lefner
San Juan residents, hold onto your wallets. The City Council majority of Sam Allevato, Larry Kramer and John Taylor recently voted to proceed with the “Option 1 water rate study”. Considering that water rate “studies” typically result in rate increases (and in my opinion, are designed to justify rate increases), it’s safe to assume that the council majority is aiming to increase your water rates.
The current option increases the basic “Tier 1” amount of water allowed by the City from its current 6ccf to 9 ccf (1 ccf is equal to 100 cubic feet of water or 748 gallons). Increasing the allocation sounds like a good thing, but this allocation is based on World Health Organization (WHO) guidelines*, a third-world standard for emergency indoor water use at 62 gallons per person per day. For a family of 4 this equals 7,440 gallons per month. In a modern country, 14,960 gallons per month for a family of 4 would be considered barely adequate for indoor use, even with water-saving appliances and no outdoor irrigation.
The problem with setting the allocation at 9ccf is that it is so low that it will cause an average family to use more water than Tier 1 allows, which then forces them into Tier 2, which in turn increases the cost by 39%. This raises the question; is the allocation about conservation or is it about increasing revenue to the City?
The new rate schedule is an attempt to “fix” the problem the City has in complying with Proposition 218, which mandates that the City cannot charge more for water service than what it actually costs to deliver it to the end user. The Capistrano Taxpayers Association (CTA) successfully argued in OC Superior Court that San Juan water customers were being illegally overcharged for water as the tiered rate structure was not cost- based. Rather, the CTA argued that the billing structure was designed to punish water users into conserving water, and generate revenue for the City. The City Council ignored repeated warnings that over-charging customers was a violation of Prop 218. The City continues to waste tax dollars to fight the court ruling in favor of the CTA and water customers.
The City is calculating its new tiered water rates by basing “Tier 1” on the cost of SJC Ground Water Recovery Plant (GWRP) water, and the other higher tiers on the cost of Metropolitan Water District (MWD) water. The success of the rate scheme will depend on the GWRP producing over 4100 acre feet of water annually; something it has not been able to achieve. If it fails to produce the projected quantity of water in this drought year, the new rate system faces significant shortfalls in revenue. If history is any judge, this will necessitate additional rate hikes.
The City Council announced that it is only increasing revenue by 5%, a reasonable sounding amount - if you ignore the fact that it has increased water rates 115% since 2004. But when all costs are factored in to Tier 1, the increase is actually 7.5% (see “Water Rate Increases” chart).
In addition to increasing the cost of water, the City is also proposing to increase already steep water meter charges, depending on meter size (see “Water Meter Increases” chart).
All San Juan Capistrano residents should be aware of what the City is actually doing, not what it wants the public to believe. Your water costs are increasing at least partially due to the bloated City employee salaries, medical benefits and pensions of those who run our Utilities Department (see SJC Utilities Dept. Employee and Executive Management Wage and Benefits charts on page ). Read the article “Comp Gone Wild to see how our employee payroll compares with a neighboring city (hint: ours is far higher).
Unless we speak out, the City employees may soon be getting yet another raise, paid for by increases to your water rates. Email your City council members c/o the City Clerk at: Cityclerk@sanjuancapistrano.org or call: 493-1171 to let them know what you think about the rising water rates and employee compensation.
* See“WHO Guidelines” link on our website at: www.ccsense.com