By Larry Stein
I am of the belief that the City Manager, the City Attorney, the City Chief Financial Officer, the previous Mayor and the previous Director of Public Works conspired to violate Proposition 218 by having one class of ratepayers pay for infrastructure, operation and debt service that solely benefits another class of ratepayers.
The GREAT Program was envisioned to take sewer water, treat it, store the water for the time period required by state law and then blend it into the general water supply. In 2010 water bonds were issued for the Water Enterprise Fund to construct the Advance Water Treatment Facility (AWTF) and supporting infrastructure. The infrastructure built included a delivery system to 3 farming entities, storage wells (ASR wells) were not constructed. The AWTF became operational in September of 2012. Two classes of ratepayers were created: one class, the users of the GREAT Water and the second class the 40,000+ commercial / industrial and residential water users. Contracts were written for GREAT Waters users who only had to pay $250.00 per acre foot. Other users pay far more.
Water credits were to be issued used by the local groundwater management agency (Fox Canyon Ground Water Management Agency (FCGMA_)) on a one to one basis for each acre foot of water generated. Due to over drafting over the previous 20+ years, there was a limited amount of water to back the water credits. From 1980 thru 2012 thousands of acres of farm land (strawberry fields and citrus orchards) had been taken out of production and developed into residential and commercial property, creating additional water credits. More land has been taken out of production since 2012, generating more water credits. At this point in time, water credits are only a future benefit since the FCGMA is not allowing any use of the water credits and may be reducing the water credits previously issued.
In 2012 the utility rates were changed. Utility rates had not been updated for 15+ years. The utility rates payers have been issued a monthly consolidated bill, a charge for water, a charge for waste water and a charge of solid waste. The water bill was split into two components, a fixed charge (to cover operational and debt service costs) based upon the pipe size of the water supplying the user and a variable charge based upon water usage, with surcharges if water usage exceeded certain limits. The debt service included the debt service on the water bonds issued in 2010 with payments starting in 2012; The debt service on the 2010 water bonds was not charged solely to beneficiaries of the GREAT Water. The courts have recognized that such a practice has a limited time line (I believe 5 years) so an entity can finish the necessary infrastructure and still have the entity charge for debt service.
The time line has run its course. The 40,000+ residential, industrial and commercial ratepayers are still paying the debt service on the water bonds that were used to construct the AWTF and are not receiving any direct benefit of the AWTF, a violation of PROP 218. The same class of ratepayers are paying the difference of the costs of generating GREAT Water per acre foot and the $250.00 per acre foot that is being collected, a violation of Prop 218. One class of rate payers are not to subsidize the costs for another class of ratepayers. The City Manager, the City Attorney, the City Chief Financial Officer, the previous Mayor and the previous Director of Public Works are aware of these actions as I have brought these allegations forward in numerous city council meeting for over 6 years.
A possible remedial action would have the General Fund repay the debt service paid by the 40,000+ residential, commercial and industrial ratepayers to the Water Fund. Such an action should lower the water rates for this class of ratepayers. The General Fund should also fund the planned improvements until such time GREAT Water is actually imported into the general water fund.
The views and opinions expressed in this commentary are those of the author and do not necessarily reflect the official position of Citizens Journal
Larry Stein is a resident of Oxnard
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