The decision to acquire Nacimiento Lake water took place in stages over a 25 year period. Many different possibilities, covering every known option, were looked at. They were rated by the State and water experts. In 1992 Paso Robles, along with some others decided on the Nacimiento Pipeline project as the most cost effective, secure and reliable alternative. Public support was very high. Prior to that decision I, as a citizen group CEO, favored building a dam on Santa Rita Creek for North County water.
A joint powers agreement was initiated with the County Flood Control District as the lead agency. Paso Robles had full and equal representation along with the other subscribers. We funded the engineering and public processing with a charge on the water bill. The preliminary work was completed, went to bid, was confirmed and fully funded in 2004, following public hearings. I came onto the City Council in December of 2004.
On April 19, 2005, I made the motion to fund the next phase of the project on a pay as you go basis. That procedure was adopted.
After listening to some of our senior citizens and persons on fixed incomes I took another look at the flat rate minimum charge. On June 7 I made a motion to eliminate the flat rate minimum, including the first 20 units of water, and move to a combined flat and consumption rate based upon a staff recommendation to address inequities. This stopped the practice of having residential users subsidize high water use businesses. It also assured the money needed to pay off revenue bonds for the project in the future. Because the joint powers agency was ready to go to sale on the bonds, time was of the essence.
On August 16, when this rate was being put into place, I requested that City staff bring back for our consideration a consumption only method of paying for water, including the Nacimiento Project.
Water is an enterprise of the City. It has separate funding and separate accounting, under State law, both here and at the State Department of Finance. During this period new court decisions (2006 & 2007) were handed down making water rates, until further notice, subject to a Proposition 218 review and approval process. In a Los Angeles case a short time before that the court had decided that water rates are not subject to Proposition 218.
The consumption only rate was brought back along with other alternatives requested by other members of the City Council. I’ve personally favored a market rate to pay for it. We were about to pass that market rate when a group of Concerned Citizens objected. They claimed that we hadn’t done an adequate independent rate study. They demanded that we do one before adopting any new rate and recommended expert firms to do the study. We allowed many firms to bid for that study but chose one of the firms that group had specified as doing a good job. The rates that were then processed for approval were the rates recommended by that consultant.
The rate increases were to be staged to ease the burden on ratepayers and were designed to be fully implemented when the water is delivered for use beginning July 2010. It was fair and equitable according to the consultant recommended by the Concerned Citizens of Paso Robles.
However, questions, concerns and negative comments continued to pour in, primarily from the group calling itself “Concerned Citizens.” The Mayor and City Administration had a sit down conference with that group and continued a dialog with some of its leadership. It became obvious as a significant group of our citizens, which comprised nearly one in five of our users, responded with protest ballots that the questions being asked were not the real reason for people being upset. We concluded that the primary concern was simply having to pay more for something that is needed to sustain life and life style. The secondary reason for some was the large investment they had in landscaping and high water use decorations or recreation activities.
Related to this were the separate charges to pay for future water costs, including infrastructure, for new construction or users. Most of those connections involve new home construction. Objections were raised by the Home Builders Association concerning those separate charges after consulting a group of water experts that they hired. The objections appeared to have some validity regarding the time line for the charges to pay for the entire project. The proposed rate used the amount of housing projected in the General Plan rather than the amount of housing that could be served by the quantities of water involved in the capacity of the line and the proposed additional purchase.
That approach would have the new residents of the next ten years paying for the initial cost of water for the new users out to the life of the system. Being unfair to future residents is almost as ethically undesirable as doing that to current residents and users. It also unfairly impacts certain socially desirable housing issues for low and moderate-income groups.
I, and others on the Council, independently approached our administration and consultants and requested that they sit down in face to face meetings with those that had reasonable objections to search out an area of reasonable fairness, recognizing that every approach has an area where personal attitude rather than data hold sway.
The letters, back and forth, stopped and the meetings were scheduled and begun. A number of approaches were presented that were worthy of consideration. Staff informed the Council Members that the discussions might lead to a different approach which would, once again, alter the city’s direction regarding funding and delivery of the project’s water.
On September second the Council deferred the decision to the following meeting to allow time to consider the approach being discussed with the involved groups.
On September 16, the Council, on my motion, rescinded the previous rate structure proposal and asked the staff and consultants to continue working on and bring to us a pay-as-you-go proposal that also recognized a more realistic time line. I pointed out when I made my motion that this is the approach I endorsed in my original Nacimiento Project motion on April 19, 2005. That motion to pay for pre-construction work allowed us to pay without any interest charges. It also gave us a repayment of money already paid when the joint powers authority board sold the bonds for construction. That repayment is enough to pay cash for a diminished treatment plant option and eliminate interest on future loans. Treatment of surface water is NOT an OPTION. It is a REQUIREMENT. Many poor nations do not treat their water resulting in over 1.5 million deaths per day world wide, according to the World Health Organization.
The City’s staff and consultants worked very hard to find alternatives that might work. The Council was briefed on some possible elements of a reduced cost approach and a proposal was crafted for monthly rates. However, the connection fee aspect was deferred pending ongoing face-to-face meetings with concerned business interests.
On October 7th a new proposal was presented to the City Council for consideration. That approach freezes the fixed rate at $18.00/month and increases the commodity user’s cost by about 25 cents per unit per year between years 2009 and 2015. The rate would be $3.33 per unit per year beginning in 2016. The first year increase, however, will be 43 cents. Workshops were held on Wednesday evening and Thursday afternoon, October 15 and 16. On those days only about a dozen people reportedly appeared to get information.
During the hearing the spokesperson for the Concerned Citizens group again appeared to protest the method of proposing the new fees. He attempted to persuade the City to re-define the fees as either an “assessment” or a “special tax.” The City, and its counsel, refused to do so.
We learned about ten days later that he already had in his hands an emailed letter he had requested from the Jarvis Taxpayers’ Association to the city. That letter went to him on an agreement to deliver it to the city. He withheld it until after his ploy. The letter stated that a different procedure is required for assessments or special taxes. However, it did not say that it was the only legal way to finance a project. The procedure used by the Concerned Citizens’ representative raised a question as to his motive in asking the questions.
During the processing of this proposed rate change, and prior to adoption by the Council, the above matter was misrepresented to the print media and a web blog by the person objecting. The city or myself responded to all forms of media. The Jarvis organization’s representative sent the city attorney an apology, refuted the assertions of the Concerned Citizens and informed us of the agreement to deliver the letter at the time it was written.
At the October 21st Council meeting, the spokesperson made allegations against the City and the Council by quoting the earlier letter without referring to the clarification and apology. The City Manager and City Attorney refuted his statements and clarified the issues. I also quoted specific state regulations and court opinions that supported the city’s position and refuted his.
The city has continued to have conferences and a dialog with those who express concerns or opinions. We have met numerous times with the development industry concerning the manner of paying for project costs attributable to new homes, businesses and industry. We moved ahead with the reduced rate structure and then were faced with a new State law which went into effect on January1, 2009, limiting automatic, incremental fee increases to a no more than a period of five years from adoption of the rate.
To its credit, the Concerned Citizens organization brought this new law to our attention and prevented us from an unintended implementation error during the process.
The time between the first passage of the rate structure and the final passage on February 2, 2009, was over two months and the new law took effect during that time span. Very few protests, as allowed under law for the users’ vote, were received and the rate passage proceeded.
Meanwhile, some members of the Concerned Citizens’ group decided to publicly challenge the legality of including water infrastructure in the water rates. They publicized their opinion very effectively despite the fact that the State of California has stated in writing from numerous sources and in numerous documents and laws that the revenue bond procedure is the usual way to finance these projects, does not require a vote of the people and is paid for from user rate collections. [To research this yourself see this web site’s: “Do It Yourself Water Research” and access the appropriate documents, especially “California’s Water, an LAO Primer.”]]
The current rate is a fixed cost per water delivery meter of $18.00/month plus use fees of $1.32 for each unit of 100 cubic feet (748 gallons) of water used. In January 2010 that rate will go up by 17 cents for those who use 5 units (3,740 gallons) or less per month. For those who use more than that the rate will increase by 43 cents per each additional unit. Each year thereafter, through 2014, it will go up a little more, from 21 cents to 25 cents per unit. The increased costs are to provide the type and amount of water treatment and blending required by the State of California for the health and safety of our water users.
In February 2009 the City Council, with general concurrence of the Home Builders Association, passed the ordinance increasing the fees for future water infrastructure and supply substantially.
During that month we also received a letter from the California Water Resources Department indicating that all Californians MUST conserve water immediately because of very low water supplies statewide due to drought. The causes are subject to controversy. The facts remain. We were told to expect our water rights to be cut back or curtailed and to look for alternative water supplies immediately. Lake Naciemiento is an alternate to our traditional diminishing supplies and our necessary supply to serve existing users and also future users through the purchase of additional entitlements.
In March 2009 the City Council initiated severe water conservation to comply with the actual diminished supply. We MUST reduce our use. We do not want to get revenue from fines but they will probably be used to enforce compliance from those who do not reduce their landscape water use accordingly. There are no restrictions on the reasonable use of water for health and safety purposes. Those who currently use more than 4 units a month per person in their household should actually see lower water bills with the new rates if they follow conservation guidelines now and in the future.
All of our efforts regarding water are based on the best available information and assumptions that current water sources will remain available and reliable and that our customers will conserve the water supplies we have available in a responsible and conscientious manner.
Because there are numerous current and pending proposals at the regional and State levels that threaten our current supplies and entitlements, I will continue to participate on my State and regional policy committees regarding State and regional water proposals. I have already made written comments regarding pending water regulations for landscaping. I am in process of analyzing new proposals for water supplies and mandatory conservation and their potential impact on our residents and industries. I intend to make my comments in writing and to keep my constituents informed through this web site and other available means of communication.
The issues are never ending. The city is in process of seeking an amendment to State law which will allow us to proceed with our phased water treatment program. This has emerged as an issue in implementation. However, if we deal with issues one at a time, while keeping all of them in consideration as we move forward, we will have many other opportunities for a better and safer life in Paso Robles.