Gilroy’s City Council will not protest groundwater recharge
rates from the Santa Clara Valley Water District, after a vote to
protest the rates failed 3-3 Monday.
Gilroy’s City Council will not protest groundwater recharge rates from the Santa Clara Valley Water District, after a vote to protest the rates failed 3-3 Monday.
Council members Perry Woodward, Craig Gartman and Cat Tucker voted to protest the charges, while Mayor Al Pinheiro and Councilmen Dion Bracco and Bob Dillon opposed the protest. Councilman Peter Arellano was absent at the time of the vote.
The district, which replenishes groundwater for the City of Gilroy and monitors its groundwater quality among other services, sent out letters Feb. 26 to well owners within the district letting them know that they could protest those fees.
“I really don’t think this protest from this city is going to send the kind of message out there that others should do the same,” Mayor Al Pinheiro said.
The ability to protest is a new right stemming from a decision by Superior Court Judge Kevin Murphy in November that said the district was illegally collecting groundwater fees, which are supposed to be put to a yearly vote by well owners under Proposition 218 and the Santa Clara Valley Water District Act. Murphy determined that the water district had to refund San Jose-based Great Oaks Water Co., which sued the district, more than $4.6 million – a year’s worth of illegally collected groundwater charges – after determining Great Oaks was overcharged in 2005-06.
Proposition 218 requires the district to send out notices outlining the protest process. A majority vote by well owners – or 1,823 objecting votes in South County – would mean groundwater charges will be void for the fiscal year beginning July 1. The district now charges $16.50 per acre foot for agricultural use and $275 per acre foot for municipal and industrial use in South County. It has proposed not to raise rates this year.
The City of Gilroy, which operates eight wells, spends $2.3 million annually on groundwater production charges for the district’s various programs and services.
If well owners failed to approve the groundwater charges, the district would lose out on $70 million in charges, including $8 million from South County.
As a result of the potential loss of fees, a report by City Engineer Rick Smelser indicated that groundwater recharging and reliability could be drastically reduced over time if well owners did not validate the district’s groundwater charges.
Both Smelser and City Administrator Tom Haglund said city staff was not trying to paint a doomsday scenario, as it could be 10 years before the city faced major problems. Still, Haglund stressed that even if the majority of well owners protested the groundwater charges and the district went one year without the resulting funding, it would be harder to reestablish that funding in the future. That could have broad implications as the city may have to take on tasks that are now completed by the water district and it could create challenges as the city plans for future development, he said.
“Groundwater management isn’t a one-year affair,” Haglund said. “It’s an every year affair.”
Half of the council members present were not convinced that a one-year protest would have major consequences for Gilroy.
The district has a responsibility to recharge groundwater in the same way that cities are responsible for providing police services, Woodward said.
“Let’s stop painting it that if we don’t pay them this ransom, then we’re not going to get water,” he said. “It’s silly.”
Tucker said some well owners she has talked to have yet to receive letters from the district letting them know that they can protest.
“I have not talked to one person who is in favor of this,” she said.
Woodward urged the district to make the same difficult financial cuts that cities have made in the midst of the current economy.
“All that the people who are protesting the water district want is for them to get lean and mean, and to become more transparent, too,” Woodward said.
Gartman, who represents the City of Gilroy along with Arellano on the district’s water commission, said the district has made some necessary budget cuts this past year but still has “a long ways to go.”
No one from the water district commented during the meeting. However, James Fiedler, the district’s chief operating officer, said after the vote that the district already has cut some of its costs by eliminating vacant positions this year, he said. In addition, it has taken a cut by not increasing water rates this year even as the cost of fuel and other amenities continues to rise, he said.
Furthermore, the district has other future expenses to contend with, including millions of dollars worth of future seismic studies for local dams, he said.
Well owners who want to discuss the district’s proposed groundwater fees can do so at a public hearing hosted by the water district at 6 p.m. Thursday in the Gilroy City Council Chambers.
