The city of Gilroy publicly opposed
”
any rate increase whatsoever
”
proposed by the water district for the upcoming fiscal year at a
public hearing in Morgan Hill Wednesday night.
The city of Gilroy publicly opposed “any rate increase whatsoever” proposed by the water district for the upcoming fiscal year at a public hearing in Morgan Hill Wednesday night.
City Engineer Rick Smelser was among about a dozen people presenting their own reasons to oppose a recommendation from the Santa Clara Valley Water District staff to raise groundwater charges for most South County well owners by 3.6 percent.
“The current process of pooling revenue and costs, and not being able to separate them, that’s the crux of our opposition,” Smelser said following public testimony. He said it was the first time he knew of that the city officially opposed a water district rate increase.
His reasoning echoed a recent court ruling that determined the water district violated its enabling statute by unlawfully commingling groundwater revenue with other funds.
The public hearing, conducted by the district’s board of directors, was attended by about 40 members of the public. The purpose of the hearing was to allow staff to present a report on projected water supplies, revenues, and costs for the coming fiscal year that begins July 1, and gather public testimony on the proposed increase in groundwater charges, from $275 to $285 per acre foot.
Although Smelser didn’t get into the details of the city’s position, other public members expressed similar concerns Wednesday. San Martin resident and longtime water district critic Bob Cerruti said he doesn’t see how the water district will spend $14.2 million, the amount of revenue it projects to collect, on services provided in South County.
Furthermore, he criticized the expansion of the public agency’s employment rolls by more than 200 employees in the last 13 years, with the average salary and benefits now estimated at $138,000; mismanagement of reserve funds that could have been used to pay for ongoing debt; and spending on projects that do not benefit South County customers while continually raising rates.
“We the well owners have to support this employment due to the greed of the district,” Cerruti said. “The district is oblivious to these tough times we are in. For some reason, you just don’t get it.”
Another San Martin resident, Louise Helland, asked the district staff to produce an “itemized” list of expenses in South County on which the groundwater revenue collected in the same region will be spent.
“Where is the list of costs allocated to South County?” Helland asked.
Board members said in upcoming budget workshops they would direct staff to prepare such a list.
District Senior Project Manager Darin Taylor said while an itemized list has not yet been produced, a summary of district expenses in South County was published earlier this year in the 2009 annual water district report on the Protection and Augmentation of Water Supplies. Some of those projects include maintenance at reservoirs and pumping facilities, seismic improvement projects on dams, and recharge of the groundwater basin from which the cities of Morgan Hill and Gilroy, as well as residents of San Martin and other unincorporated areas receive their water.
During his presentation, Taylor said the rate increase is suggested due to the growing cost of imported water from outside the district, which is restricted by regulations protecting endangered species. Furthermore, the district will lose revenue because of its mandatory conservation program instituted this year, which will likely reduce water use by 15 percent.
In other public testimony Wednesday, South County resident Stu Kingman said if the district chooses to raise groundwater rates, it will “knowingly violate state law.” He was referring to an April 23 county Superior Court ruling in which a judge determined the district has not been in compliance with Proposition 218 of the state constitution, because it has not sought voter approval for groundwater charges.
“Any groundwater production charge discussion other than rate refunds and reductions is superfluous,” Kingman said.
Gilroy Chamber of Commerce President and CEO Susan Valenta said it doesn’t matter that the average monthly water bill would go up by 34 cents in South County, as district staff have pointed out. While the district raises salaries and offers more benefits for its employees, the customers who will be paying the rates are struggling with higher sales tax, home foreclosures, unemployment, and declining property values, Valenta said.
“The expenses you are proposing are beyond what the private sector is able to offer, and beyond what your constituency is able to afford,” she said.
The district board has also directed staff to produce a budget scenario in which no increase in water rates would be approved. Taylor said such a scenario would require $5 million more in operations cuts, on top of the $12.5 million already suggested for the fiscal year which begins July 1. That scenario will be presented in detail at the next public hearing, May 12, at water district headquarters, 5750 Almaden Expressway, San Jose.
