The Santa Clara Valley Water District is in the midst of an
effort to update the state law that created the agency, but critics
say the changes won’t do enough to comply with state law.
The Santa Clara Valley Water District is in the midst of an effort to update the state law that created the agency, but critics say the changes won’t do enough to comply with state law.
Significant differences between the proposed law and the existing law, known as the Santa Clara Valley Water District Act, include more authorized uses of groundwater charge revenues, updated language and procedures to address the demands of climate change, and what one critic described as an overall expansion of the water district’s purview.
A staff report submitted with the new District Act draft says one purpose of the proposal is to “strengthen local control of water resources within the county.” Other stated reasons to revise the District Act include to add accountability and transparency to the agency, clarify language, and modernize the act.
The water district’s board of directors approved the draft in December 2008, and staff presented it again at an Oct. 27 board meeting to solicit updates before it is submitted for approval by the state legislature. That meeting was a few months after a Superior Court Judge Kevin Murphy ruled that the agency violated the existing District Act by spending groundwater charge revenues that the act does not allow.
“The proposed new District Act is intended to greatly enhance the district’s powers over every issue related to water,” said Tim Guster, general counsel for Great Oaks Water, which won a lawsuit against the district for repayment of ground water charges. “And at the same time, (the act) tries to reduce or eliminate the rights of well owners with respect to the water they’ve been pumping for decades.”
For example, one provision of the proposed update allows the agency to declare a privately owned well unfit for use if it has a negative impact on the overall water supply, Guster said. The district can then limit the well’s use.
“The decision of what does and does not negatively affect water supply is a matter that’s totally in their discretion to decide (according to the proposed draft),” Guster said.
The new provision allowing closing or limiting the use of a private well would require public notice and a public hearing before such limitations are enacted, water district spokeswoman Susan Siravo said. A justifiable reason to limit a well’s use in this way could be if over-pumping threatened to create sinkholes on nearby properties.
The section of the existing law that identifies allowable uses of groundwater charges – one issue in a 2005 lawsuit filed by Great Oaks – is expanded and broadened in the new draft. The new section adds expenses that provide “future benefit” for the district. The existing law does not specify such a use.
“This allows for proactive-use planning to ensure ample groundwater supply in the future, rather than only looking backward towards past usage,” Siravo said.
Water district CEO Beau Goldie, general counsel Debbie Cauble, and directors Rosemary Kamei and Sig Sanchez did not immediately return repeated phone calls.
Great Oaks, a company that serves about 100,000 customers in south San Jose, was the plaintiff whose lawsuit resulted in Murphy’s ruling, which also declared groundwater charges violate Proposition 218 of the state Constitution. In November, Murphy ruled the water district must pay Great Oaks a full refund of charges paid in 2005-06 – about $4.6 million.
Water district staff did not say the District Act redraft is a response to the judge’s ruling, which they disagree with and will likely appeal. A brief section in the new proposal, which is not found in the existing law, says the water district will comply with Proposition 218 “prior to imposing or increasing any fee for property-related services.”
One way the new District Act improves accountability is by allowing voters to submit a petition to create new water extraction zones. The new law would consider creating such zones if at least 10 percent of registered voters within the proposed zone signed a petition.
The law also clarifies the process by which groundwater charges are levied, setting timelines for public hearings and the mailing of public notices.
Last week, the water district mailed a groundwater charge “Frequently Asked Questions” sheet to about 1,500 well owners, according to Siravo. The brochure was sent to those customers who received a biannual statement of water use – mostly large-scale and agricultural users.
“A recent court decision regarding groundwater charges does not impact your current statement or the amount you owe,” according to the pamphlet.
But critics said the water district has to do more to comply with Proposition 218, passed by the voters in 1996 as the “Right to Vote on Taxes Act.”
“Proposition 218 requires a majority vote of affected property owners, or a two-thirds vote of the entire electorate for approval of the groundwater charge,” Guster said.
Gilroy will continue to pay its water bills – about $2.6 million annually, said City Administrator Tom Haglund – and will wait “for the dust to settle in the Great Oaks lawsuit” before it decides how to move forward, Councilman Perry Woodward has said. He estimated the value of the city’s refund to be more than $5 million and possibly closer to $10 million.
As a public agency, cities are required to issue “Proposition 218 notices” to all residents who will be affected by a proposed hike in taxes or property-related fees, according to Morgan Hill City Manager Ed Tewes.
A two-page letter that Morgan Hill sent out recently was clearly titled “Proposition 218 notification.” It explained the reason for the proposed rate increase, the amount of the hike, and how customers can protest the increase in writing.
The letter says that property-related fees such as retail water charges are subject to “majority protest” under Proposition 218, and if more than half of property owners affected by the change object in writing the new fees cannot be imposed.’
The water district does not distribute such notices, but it should in order to comply with Proposition 218, Tewes said. To achieve compliance, the water district also must stop subsidizing agricultural water users with higher rates for municipal users . Or the agency could call a vote asking the voters if they approve such a subsidy, Tewes said.
Guster said Proposition 218 does not require notices to inform voters that they can protest. “But it’s smart,” Guster said.
Both Guster and Tewes said they have never received such notices from the water district and never have been formally notified whether they can protest the groundwater charges. They said they have only received letters telling them when the groundwater-setting process is to begin each year and scheduling a public hearing to gather input on the annual proposed rates.
Siravo said the process for setting groundwater charges for 2010-11 is “under development” but would not say if any significant changes are in the works.
