The Gilroy City Council unanimously opted to devote a study
session to discuss bidding out city services. Councilman Craig
Gartman proposed the idea after hearing that the City of
Indianapolis has had success with outsourcing several of its
departments and services.
Study session for privatizing city services
The Gilroy City Council unanimously opted to devote a study session to discuss bidding out city services. Councilman Craig Gartman proposed the idea after hearing that the City of Indianapolis has had success with outsourcing several of its departments and services. Gartman stressed that outsourcing did not necessarily mean privatizing all departments—departments also could be run by other agencies or nonprofits or by the city itself, depending upon what was deemed most efficient, he said.
Although Gartman initially hoped that the subject would be discussed at a study session during the next council session, most council members felt the issue was not urgent and could be addressed at a later time.
Water district votes put off until April 19
On the other hand, council members had plenty to say right away about groundwater charges being proposed by the Santa Clara Valley Water District. 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.
The ability to protest is a new right stemming from a decision by Superior Court Judge Kevin Murphy’s 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 the 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. In this case, 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 and statements by water district Chief Operating Officer James Fiedler indicated that groundwater recharging and reliability could be drastically reduced if well owners did not validate the district’s groundwater charges.
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, and has proposed not to raise rates this year.
Several council members said they appreciated the district’s services but not its groundwater charges, which they considered to be too steep. Many also said they did not like being threatened with a decline in services if South County well owners collectively decided to protest the fees.
“I don’t like that feeling of being pressured, or extorted, if you will,” Tucker said.
The City of Gilroy ultimately has little sway in the final outcome, several council members said, as it only owns nine of the 3,644 wells in South County. The city of Morgan Hill has about the same number of wells as Gilroy, Fiedler said.
The council asked city staff to gather more information, and the council will formally vote on the matter during its April 19 meeting.
Lease extension for Gilroy Gardens
The council also voted 6-1 to extend its lease with Gilroy Gardens. Gartman, the lone dissenter, said he could not support the lease extension without considering how the city could cover about $65,000 in annual interest it must pay on a loan it took out to purchase the theme park. City staff says that the park is a major economic engine, offering 1,200 unskilled and youth jobs and bringing in 350,000 visitors to the city.
