Few well owners protest water rate hike

Water district

Fewer than half of South County’s 4,000 well owners protested
the 3.6 percent increase in groundwater rates by the Santa Clara
Valley Water District.
Fewer than half of South County’s 4,000 well owners protested the 3.6 percent increase in groundwater rates by the Santa Clara Valley Water District.

The announcement came late Thursday just two days after the protest tabulation began, though spokesman Marty Grimes said official numbers were not yet available by Monday.

“There were far, far less than needed to reach a majority in either zone,” Grimes said.

This was the second year the wholesale water retailer adopted a resolution to hold a protest procedure to comply with the District Act – a state law that created the district – and similarly comply with Proposition 218 that says customers must have the opportunity to vote on rate increases affecting their property.

A simple majority vote of well owners in South County – marked by properties south of Metcalf Road – was needed to eliminate a rate increase for 2011-12. Water rates are expected to rise to $285 per acre foot for municipal and industrial use and $17.10 per a/f for agricultural use. An acre foot is enough water to supply a family of five for one year.

The water district uses funding from $9.2 million expected to be generated by groundwater fees this fiscal year to replenish the groundwater basin, water recycling, water conservation and environmental projects. The proposed increase was initiated by a higher-than expected conservation effort by rate payers and rainy season – the pickle proved too taxing on the district and rates had to be raised to balance lost revenue, officials said.

In 2009, Superior Court Judge Kevin Murphy ruled the district was illegally collecting groundwater fees and not complying with Prop 218 and the District Act; in 2010 the protest procedure was born. However, the district appealed the ruling in favor of San Jose-based Great Oaks Water Co. which was awarded more than $4.6 million in a year’s worth of illegally collected groundwater charges. A decision is pending and expected next year.

The protest this year and last was mailed to well owners with instructions as to how to protest. The district was under fire last year for the four-page newsletter that some said disguised the pertinent information.

The 2011 instructions say “whether the water district’s groundwater production charge is imposed upon a person as an incident of property ownership such that it is property-related fee subject to Prop 218 is an issue currently before the courts that has not been finally decided;” that sentence also appeared in 2010’s protest instructions.

Last year, just 433 valid protests of 3,644 well owners were counted in South County.

South County’s own water district director, Don Gage, forwarded some complaints and other issues from South County residents to district staff. Some residents were confused about the “one well, one vote” restriction. Often a well is used between several homes, though only the well owner (whoever’s name it is that appears on the water bill) is allowed to submit a protest letter.

Gage, who was elected in November 2010, did say the letter sent to well owners was not as clear as it should have been.

“It still need a little bit of work,” said Gage, who is also the chair of board. “It would be better if it were on the very first page, with a simple ‘yes’ or ‘no.’ I want to make it as simple as possible.”

Gage said he gave the district direction to make the letter more clear and perhaps include the legal information on the second page. Gage also said he received phone calls from people who said they weren’t notified and he asked the district to investigate.

“There’s still some improvement that can be done,” Gage said.

Nearly all water used in South County is groundwater with about half pumped by private well owners for agriculture use and the other half used by businesses and residents who pay a water bill each month to a water retailer, such as the city of Morgan Hill.

Had the protest succeeded, the district would have lost the revenue generated by a 3.6 percent increase – several million dollars – that will go to a board vote this month before it is passed onto well owners. Last year – when well owners could have eliminated groundwater fees altogether for one year because the district did not increase rates – district water supply manager Keith Whitman said a successful protest could also mean no more drinking water or farm water from local aquifers.

“We would interpret (a majority protest) as, they don’t want to pay the charge that supports all those capital projects,” Whitman said in April 2010. “We’d have no choice but to respond and reduce those programs accordingly. It would be difficult even maintaining our dams and reservoirs.”

A failed protest comes as a signal that the community knows the importance of the water district’s role, the district’s top official says.

“I think this result reflects positively on our efforts to be engage and outreach to the community,” water district CEO Beau Goldie said Monday. “I believe the community understands the value of the services we provide and recognizes that we are committed to continuing to minimize cost to deliver those services.” The district held three public hearings, including one in Morgan Hill, about the groundwater rates. The Morgan Hill meeting was attended by fewer than 30 people and a handful were city or district employees.

“The well owner survey we conducted recently tells us how we can improve our service. We will continue to reach out to the community to build awareness about how the water system works and what it takes to maintain that system,” Goldie said in a statement.

A San Martin well owner, Steve Coney, beat the water district in small claims court in March after a judge ruled he didn’t have to pay $2,700 in pump taxes or groundwater rates. He said he won the claim based on the water district’s own admission that Prop 218 requires voter approval for property related fees apply only to well owners like himself that pump water for their own use, and not to private companies who resell it such as Great Oaks Water Co.

The water district sued Coney last year, for not paying groundwater charges since 2008. He counter-sued for about $7,000 for past charges and court-related fees.

The water district never secured voter approval for the groundwater charges they imposed on well owners in Santa Clara County since the law was enacted in 1996, the ruling said. Coney believes other well owners have been charged illegally for years. Not until last year did the water district comply – though the method was clandestine – with Prop 218, Coney has said.

At least one other well owner held firm her aversion of the district’s “education” on the protest since last year. San Martin resident Louise Helland wondered why the district doesn’t take advantage of modern technology and use an email platform for the protest.

“It’s so specific. If you don’t dot the i’s and cross the t’s, it’s invalid. It should be very clear,” Helland said. She said a private citizen willing to foot a small fortune would have to launch a campaign to inform South County of their right to protest, or the water district could use its own money to educate its customers, Helland said.

“They use our money for lots of things that we don’t want to spend our money on. They should spend it on telling people what their rights are. In everything, everyone has to make very careful choices right now,” said Helland, who has lived at her San Martin home since 1987.

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