The Water Replenishment District of Southern California (WRD) Board of Directors voted unanimously (4-0) to increase its assessment for pumping water from underground aquifers by 9.9 percent, effective July 1, during a nearly three-hour public hearing last Friday, May 10. Boardmember Lillian Kawasaki was absent, and Boardmember Willard H. Murray Jr. was absent during most of the public testimony but present for the vote.
The public hearing that drew a crowd of more than 75 people to the WRD’s headquarters in Lakewood was the agency’s first attempt to comply with Proposition 218, a state law that requires governments to notify property owners and give them the right to protest any proposed increases in assessments and taxes before they’re voted on and approved. Under the law, a majority protest of more than 50 percent of the property owners being assessed the fee invalidates any rate increase.
According to WRD staff, the notices were sent out to all parcel owners, holders of pump rights and well owners within the WRD’s 420-square-mile service area, which overlies 43 cities and a population of just under 4 million in the Central and West Coast Basins of southeast Los Angeles County.
The WRD board approved the rate hike, despite several objections brought by the cities of Signal Hill, Downey and Cerritos, which have filed a lawsuit against the agency for not complying with the state law in previous years. Although a Los Angeles Superior Court judge filed rulings in 2011 that favor the cities’ position, the case is still awaiting a final judgment that would determine monetary damages.
Since the initial court ruling was issued, the cities and others have withheld replenishment assessment (RA) payments that WRD staff said are expected to total $18.9 million by the end of the year.
Officials and property owners from these cities and others submitted written protests, claiming that the WRD’s recent attempt to comply with the law in which the agency had sent out nearly 800,000 public notices doesn’t follow proper procedures and constitutes a “waste of public funds,” adding that some notices were sent to wrong addresses, while some property owners didn’t receive a notice at all.
City officials objected to so many notices being sent out, stating that they should have only gone out to the “pumpers,” which own pumping rights and are responsible for paying the RA fees.
“Your current attempt to comply [with Proposition 218] has not been in good faith and fails under any reasonable interpretation of the law,” said Signal Hill City Councilmember Larry Forester during the public hearing. “WRD continues to raise water rates with no reasonable justification. Our agency has been forced to make significant cuts in services to our residents during the recession… WRD has circumvented the rights of the pumpers to properly notice the protest by sending $1 million worth of unnecessary mailers to our residents and businesses who still do not know what your mailing means. Your purpose was to dilute the protest.”
Still, it was determined by WRD staff that a majority protest had not been established under all three scenarios: parcel owners, holders of pump rights and well owners. WRD staff stated that within both basins there are 175 holders of pumping rights, 657 wells and 793,800 assessment parcels.
WRD staff said only 341 protests were received by mail or hand-delivered before the public hearing was concluded. A total of 324 protests were from parcel owners and 17 were from pumping-right holders.
Edward Casey, the lead attorney representing WRD in several lawsuits regarding Proposition 218, argued that WRD has followed the law.
“A couple of years ago, those cities sued the District on the claim that the District did not give enough notices under Prop 218,” Casey said. “They then withheld $18 million on the basis of that claim, but now, a couple years later, they say that the District has given too much notice under Prop 218 even though that notice led to a number people coming here for the first time.”
Some residents, water-utility representatives and city officials solely objected to WRD’s higher rate but had no objection to its procedures to follow Proposition 218.
The approved 9.9-percent increase in the RA rate, raising from its current charge of $244 per acre feet of water pumped to $268 per acre feet of water, allows WRD to purchase 16,000 acre feet of water from imported sources. WRD staff had previously proposed increasing the rate by 22 percent or to $298 per acre feet of water, however, the agency’s Budget Committee and technical advisory committee, which includes water-utility representatives from Central and West Coast basin associations, ended up recommending the smaller increase.
Forester said that he had an issue with the WRD’s keeping over $100 million in reserves, while Signal Hill city officials have stated that the WRD has increased its rate by 96 percent since 2006. “A special-purpose district has no need to maintain unlimited amounts of reserves, especially when it does this type of taxation,” he said.
WRD General Manager Robb Whitaker, however, said that, as of March 31, the balance of unrestricted reserves was $6.7 million, beyond the reserves restricted for capital projects and water purchases.
Scott Ota, WRD chief financial officer, said that WRD was able to “stabilize” the RA rate last fiscal year by using $21 million in carry-over funds, however, this fiscal year the WRD is budgeting a shortfall in its ability to purchase imported water needed to replenish aquifers. He added that, despite an increase in demands and regulations, the WRD has cut projects, programs and administrative costs in fiscal years 2012-13 and 2013-14 for a total decrease of more than $3.3 million.
WRD Board President Albert Robles, who was the only board member to speak during the public hearing, pointed out that the costs for purchasing imported water is expected to rise by an additional 5 percent starting next year, which comes out to a $75 increase in fees charged to the WRD, nearly three times more than the WRD’s own rate increase. WRD staff stated that the average single-family household pays $10 a month or less in WRD-related costs. With the 9.9-percent increase, most households will see their monthly water bills rise only a dollar, according to WRD staff.
Signal Hill city officials, however, have said that WRD costs make up 31 percent of the City’s water-department budget.
South Gate City Councilmember Bill De Witt agreed with other cities that the notices should have only gone to the pumpers, but he called on the WRD board to come to an agreement to quell rising litigation costs, which WRD is budgeting at about $2.5 million in fiscal years 2013-14.
“Let’s see if we can get a package together,” he said. “Let’s get these cities together and see if we can hammer out some compromises so we’re not cutting at each other’s throats… It’s an expense we all bear.”