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Proposition 218 Is The Fastest Way To Raise Money, But Is It Right?

 

“I have never understood why it is ‘greed’ to want to keep the money you’ve earned, but not greed to want to take somebody else’s money.”

—Thomas Jefferson

Proposition 218

Ventura Water will push the boundaries of the law as it tries to use Proposition 218 to raise money to meet the Wishtoya Foundation Consent Decree.

In the next 12 months, Ventura Water will ask the City Council to increase water rates for 30 wastewater projects and 28 water projects by 2024. These costly projects will benefit some property owners. Other projects will help the community at large.

As of June 30, 2018, Ventura Water accumulated $115,000,000 for projects they planned to build between 2012-2018. Still, they need $449,586,000 more before 2024. How did we commit to spending almost $450 million, and why weren’t you asked to vote on it?

WHAT WILL THIS COST YOU?

These new rate increases will come on top of the increases imposed over the last six years. In 2012, Ventura Water wanted to increase rates to:

  1. Replacing aging pipelines and facilities
  2. Building projects to improve water quality
  3. Constructing new groundwater wells

In 2012 the average homeowner and family of 4, received a bi-monthly bill of $73.27 and sewer charges of $72.45 for a total of $145.72. That same family is paying $105.03 for water in 2018.  Add sewer charges of $104.64 and their total bill is $209.67.  This is a 43% increase over the 2012 rates.

From 2018-2024, expect a similar rate of growth. Your new water bill may look like this:Proposition 218

HOW DID WE GET INTO THIS SITUATION?

Propoosition 218In March 2012, the Ventura City Council signed a Consent Decree that requires Ventura Water to stop putting 100% of its treated wastewater into the Santa Clara River estuary by January 2025. The decree stems from a Federal complaint filed by Wishtoya Foundation. Former City Manager, Rick Cole and Ventura Water General Manager, Shana Epstein, signed the consent decree on behalf of the city. The city no longer employs either of them.

Keep in mind that voters had no voice in the City Council consenting to the decree in 2012. Now, Ventura Water wants to deny voters the chance to say how we spend the money to meet the order, too. It plans to use Proposition 218 to get those funds.

HOW AND WHY CAN VENTURA INCREASE MY RATES?

So how can Ventura Water impose such large fees against its citizens without the traditional right to vote on such matters? The answer lies in how Ventura implements Proposition 218. Approved by the voters in 1996, Proposition 218 allows Ventura to raise money in one of three ways:

  1. General taxes. Those taxes used for general governmental purposes. Prop 218 requires the traditional voting procedure, notice, a ballot and an election measure. 51% of the voters must approve it. Ventura’s Measure O sales tax was one such example.
  2. Special Taxes. Any tax imposed for specific purposes and placed in a general fund. A Special Tax requires a 2/3 (66.67%) majority vote. The City sought this type of tax in 2009. It was Measure A on the ballot. It was a 1/2 cent sales tax for public safety and other specific projects. Monies would have been placed in the city’s General Fund. It failed.
  3. Special Assessments, Fees and Charges. Fees or charges means an assessment imposed as an incident of owning property which receives a unique benefit. The city can only impose such fees by affirmative voter approval. The exception being that prior voter approval is not required for “any assessment imposed exclusively to finance capital costs or maintenance and operation expenses for sidewalks, streets, sewers, water…”

VENTURA WATER TURNS A NON-VOTE INTO A YES VOTE

Ventura wants to use option C, Special Assessments, Fees and Charges to impose higher water rates.

Here’s how they’ll do it. Instead of putting it on the ballot, Ventura Water sends a water bill. Somewhere in the body of that bill, it tells you why the rate increase is necessary. You may dispute the rate increase by voting “NO” within 45 days, but the process is cumbersome. To disagree, you must download a protest form, complete and mail it or take it to City Hall by a specific date. Fail to jump over those hurdles and the City doesn’t care what you think or want. If 51% of the ratepayers have not voted ‘NO,’ that is the end of the matter. There are 32,000 ratepayers. Sixteen thousand one must vote NO to defeat an increase.

Proposition 218, now Article XIII C and D of the California Constitution, made the following findings:

         “The people of the State of California hereby find and declare that Proposition 13 was intended to provide effective tax relief and to require voter approval of tax increases.  However, local governments have subjected taxpayers to excessive tax, assessment, fee and charge increases that not only frustrate the purposes of voter approval for tax increases but also threaten the economic security of all Californians…This measure protects taxpayers by limiting the methods by which local governments exact revenue from taxpayers without their consent.”

When the City sought the last rate increase they took the position that they had the right to raise the rates without prior voter approval. They believed the procedures they followed were consistent with Prop 218 language, as interpreted by the California Supreme Court.  They maintain that they “may raise other fees or impose new fees without prior voter approval” for anything they chose to label a water or wastewater project.

But it doesn’t end with this interpretation alone. A California Supreme Court challenge goes further.

TESTED IN THE COURTS

The California Supreme Court in Bighorn-Desert View Water Agency v. Verjil (2006)39 Cal.4th 205, at page 205, addressed the question of whether voters had the right to put an initiative on the ballot to reduce water rates. The court ruled in favor of the water agency and interpreted Prop 218’s language to mean a city “may raise other fees or impose new fees without prior voter approval.”  The Court’s decision was specific. It didn’t involve the question of whether imposing fees to deal with a Consent Decree are valid.

Notwithstanding the protective measures of Prop 218, the City of Ventura conveniently interprets Prop 218 to still impose fees and charges beyond the simple costs of service to the homeowner. However, the court never went that far.

The City of Ventura’s interpretation of Proposition 218 is overreaching when it comes to any matter about water, wastewater and related environmental projects.

That decision by the Supreme Court only involved the issue of water delivery through a pipeline and whether voters could use an initiative process to require prior voter approval for the costs of that delivery.   It did not involve a question of whether fees imposed to deal with a $500 million water and wastewater projects together with environmental costs, expert studies, attorneys fees and a plethora of expenses arising out of a ConsentDecree decided by a City Council in 2012, and in which the voters had no voice.

What if the costs are not exclusively operational costs? What if the expenditures benefit the entire community, not just ratepayers? Does Proposition 218 apply in those circumstances? Bighorn-Desert View Water Agency v. Verjil does not answer these questions.

No Precedent For What They Plan To Do

In determining whether to seek prior voter approval, we hope that the new City Council will keep in mind the following the language from the Supreme Court in Bighorn case:

            “…the agency’s governing board may … raise fees or impose other fees and new fees without prior voter approval.  Although this power-sharing arrangement has the potential for conflict, we must presume that both sides will act reasonably and in good faith, and that the political process will eventually lead to compromises that are mutually acceptable and both financially and legally sound.”        (Emphasis added).

THE CITY MAY FACE A SERIOUS LEGAL CHALLENGE

If the City is considering rate increase of this magnitude without prior voter approval they should be mindful of the language in Prop 218. It provides that “in any legal action contesting the validity of an assessment, the burden is on the agency (Ventura Water) to demonstrate that the …properties in question receive a special benefit over the benefits conferred on the public at large…”

Complying with the Consent Decree by not putting wastewater into the Santa Clara River benefits all citizens, not just ratepayers.

Editor’s Comments

Ventura Water is proposing a mix of costly projects. Some will benefit property owners, and some will help the community at large. Building a pipeline and related infrastructure to import state water at the cost of $50 million benefits all property owners. Ratepayers generally accept this. Spending beyond that to build projects to satisfy a federal judgment on the Santa Clara Estuary to protect the ecology of the estuary is a problem.

Proposition 218 may not cover projects to meet a federal judgment on the Santa Clara Estuary to protect the ecology. We recommend a vote of the citizens in that instance.

Warn The City Council Of Ventura Water’s Potential Error

Below you’ll find the photos of our current City Council. Click on any Councilmember’s photo and you’ll open your email program ready to write directly to that Councilmember.

Let then know that Venturans must vote on a water rate increase to pay for the consent decree. Not participating in government makes us worse because our city government isn’t working for all of us.

Councilmembers Councilmembers
Councilmembers Councilmembers
Councilmembers Councilmembers

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Keeping an eye on the City Manager

Take Notice Of The New City Manager In The First 100 Days

“…Great responsibility follows inseparably from great power.”
—Voltaire

What’s next for Ventura with a new City Council and a new City Manager? Is Ventura better prepared to meet the challenges of 2019 and beyond? At the inception, the answer may be no. It takes time for city government to change course even if danger signals abound. Given time, however, there are many things to be hopeful about.

Ventura Welcomes A New City Manager

As of this week, Ventura’s new City Manager, Alex McIntyre, started his new position and will begin getting acquainted with staff, community leaders and the city at large.

New City ManagerMr. McIntyre is no stranger to managing municipalities so it goes without saying that he will become intricately familiar with Ventura’s budget and various legal agreements over the next few months. He begins his working relationship with a seven–member city council, two of which will be new and inexperienced.  He also will meet a notoriously entrenched bureaucracy.

Because the former City Manager, Mark Watkins, left the City Manager position in December 2017, Ventura has operated with interim city managers for 11 months. During that time, city employee turnover and vacancies has become problematic. One job site showed 55 City of Ventura job openings alone.

The first priority will be filling positions critical to providing departmental leadership, and in turn quality public services. Key positions, such as Public Works Director and Finance and Technology Director, will likely be filled by one of Mr. McIntyre’s own team members. Other key positions and new direction are badly needed in a community that is still struggling with the Thomas Fire rebuilding programs.

New City Manager can help with Thomas Fire rebuildingNotwithstanding assurances from the Community Director, after the Thomas fire disaster, the rebuilding process has not been smooth. Hundreds of citizens have been presented with inconsistences in building, planning and permits for Thomas Fire victims trying to rebuild and repair their homes. Then there are some homeowners who are concerned that any form of complaining will further delay the process but these same homeowners share many horror stories outside of City Hall.

As an example, while one planning checklist says that a Mechanical, Electrical, and Plumbing services report (MEP) is not required for homes under 3,000 sq. ft., Building and Safety has been known to request an MEP anyway. While maybe this request is made as an abundance of caution, it places long delays and huge costs and angst upon the fire victims. Another homeowner, who lost their home in Clear Point, remained upset that after the height allowance for 2 story homes was increased because of complains by homeowners, the height allowance for single story homes was decreased.

While these types of arbitrary decision can be appealed, an appeal process may take months or longer. For folks who just want to get past the nightmare and get back into their home, this is a cruel and harsh procedure. It is strongly suggested that the process be reviewed and a streamline. It is recommended that a 5 day appeal process be implemented to eliminate any bottlenecks in the building & safety and permit process.  This would be a good first step for our new City Manager.  Building confidence in his leadership is very important for the community.

A New City Council And A New City Manager

The next priority will be the education and training needed to help the new city council become fully familiar with city budgets, the Comprehensive Annual Financial Report (CAFR), finances, the Casitas Water Agreement and various other legal agreements, protocols and procedures so future decisions will be based upon a good understanding of past city council actions.

Finally, getting a realistic handle on whether to now spend another $536 million on the Capital Improvement Plan (CIP) projects, for new water and wastewater plants, within the timeframe mandated by the Wishtoya Foundation Consent Legal Decree, or extend the date for compliance of that agreement is extremely important.

Compliance with the current deadline of January 1, 2025, is likely improbable.   That 2025 deadline for compliance is looming, yet after 6 years of numerous biological studies, the State Water Board has still not made any decision on how much of the 9 million gallons per day of treated wastewater can continue to be released into the Santa Clara Estuary, or how much of that wastewater must be pumped and used for other purposes.

State experts have reported that Direct Potable Reuse (DPR) of wastewater is not safe for human consumption and further studies on the safe use of that water are not planned for another 3 years. Even if approved, the State of California will then have to develop and approve statewide standards.  When and if that happens, this would be followed by a complex EIR and State Water Board hearing process to determine specific standards for Ventura.

Nowhere in the U.S. have regulatory standards been approved for DPR.   Notwithstanding these hurdles, the majority of this past City Council has continued to march toward compliance by 2025, and continue to plan to raise water and wastewater rates to build projects for DPR.  It is obvious that the City of Ventura must take further action available through the Wishtoya Agreement.  Read the Consent Decree here.

In 2017, Ventura experienced one of the worst disasters in its history with the Thomas Fire. The city’s financial and human resources have been extended beyond its limits.  Add that to the burdens of a Federal Consent Decree agreed to in “private session” by the City Council in 2012, and our community faces real financial distress.  It is imperative that the City of Ventura take the legal steps now and direct the City attorney to petition the court to extend the implementation deadline until 2030 -2035.  The Consent Decree recognizes and permits that process in article 26.   Why the immediate past City Council has been dragging their feet on this issue is perplexing.  If there is a good reason, nobody is sharing it with those who matter – the citizens and rate payers.

Editors’ Comments

With great power comes great responsibility. The new City Council and City Manager bear the burden of facing daunting challenges. We hope they will be powerful enough to meet those challenges.

Ventura needs a Water Commission to oversee the water and wastewater processing.

With Water, The Simplest Solution Is Best

“Water is life, and clean water means health.” —Audrey Hepburn

with waterVentura needs to get its priorities straight about water—and fast. On July 9th, Ventura Water will ask the City Council to approve direct potable reuse (DPR). Ventura Water views DRP as a primary alternative source for increased drinking water. The project will cost $538 million of taxpayer dollars. The trouble is, it’s an untested, unproven and unregulated solution to our water needs. Why would the City Council gamble with the health of its citizens?

Ventura Water already gave a similar presentation to the Ventura Water Commission in May, when they asked the commission to approve the 2018 Annual Water Report. Ventura Water’s priorities were to add DPR as an additional water source. State water would only act as a backup supply to the recycled water program.

The Ventura Water Commission rejected the idea. They made it clear that the city should look to State water as a primary resource to supplement our existing water sources and reconsider DRP only as a backup when it is perfected.

How We Got Here

with waterTwo legal agreements jeopardize Ventura’s water supply. The first was a Consent Decree requiring Ventura to cease putting 100% of its treated wastewater into the Santa Clara River estuary. It needs to be diverted somewhere else by January 2025.

The Consent Decree stems from a Federal complaint filed by Whistoya Foundation [WISHTOYA VS. CITY OF SAN BUENAVENTURA, CASE NO. CV 10-02072]. The City Council consented in March 2012. Rick Cole and Shana Epstein signed the consent decree on behalf of the city. The city no longer employs either of them.

The second was a new contract between the City of Ventura and the Casitas Municipal Water District executed by the City Council in May 2017. The new contract obligates Ventura to reach Water Balance by 2020 to maintain its current water rights. To achieve water balance, Ventura must find an additional source of water.

Both agreements are disturbingly vague. The Consent Decree requires Ventura to cease putting treated wastewater into the estuary. It doesn’t specify where to place treated water or how to use it. It only states it cannot go into the estuary.

There is one exception. If a scientific panel, based on biological studies, decides the environmental health of the fish and wildlife in the estuary need that water, Ventura may release 50% into the inlet. There have been four studies in the last six years. The findings indicate the risks are unacceptable. We’ve noted some of them below.

with waterThe new Casitas Water contract entitles Ventura an amount of water based on projected needs and adjusted for drought staging conditions. Ventura Water anticipates our water needs at 5,669 acre-feet per year by 2025. By then, they expect we’ll be out of our current drought conditions. Under the1995 contract, Ventura was allowed a minimum of 6,000 acre-feet of water per year. That water could be used in the western part of Ventura (everything west of Mills Road) and the eastern part of the city, if necessary. The new contract changes that and puts East Ventura at a disadvantage. The old agreement allowed Ventura to blend Casitas water with the East End to achieve better quality. The new contract does not allow any use for the East End of Ventura.

The Race To Make Ventura First

Ventura Water seized the opportunity to make the city the first to used recycled wastewater to drink. No cities in the world have used recycled water except Windhoek, Namibia and a small town in Texas. Neither place had other water options.

Since 2012, employees at City Hall and the Ventura Water Department have been actively publicized and pushed VenturaWaterPure. They view the project (toilet-to-tap) as the primary source to supplement our drinking water resources. They believe State Water should only be used as a backup in case something went wrong with the recycled water.

Ventura Water says we need the project:

(1) To augment our water supply from a reliable source

(2) As beneficial reuse of wastewater effluent

(3) To improve our water quality.

They assure us that VenturaWaterPure will meet these goals. Their assurances are misleading and just not right.

What We Know Now

We’ve learned a lot since 2012 when this began. For instance, in February 2018, Stillwater Sciences issued a final report on releasing treated water into the Santa Clara River estuary. It recommended diverting 40%-60% of the wastewater, not 100% as initially presented to the City Council. Stillwater Sciences filed the report with the State Water Resources Control Board (SWRCB). The SWRCB has not decided on the amount to be released yet.

with waterIn August 2016, a report by a state-appointed panel of experts concluded it was “technically” feasible to use DPR, but there are serious health risks. Here are some fundamental problems outlined:

  1. Guidance and regulations currently do not exist for DPR
  2. Of specific concern are chemicals adversely affecting the development of fetuses and children, plus any as-yet-undiscovered compounds.
  3. There are no standards to guard against Cryptosporidium, and Giardia to maintain a risk of infection equal to one in 10,000.
  4. Reverse osmosis is unable to detect and remove low molecular weight compounds such as halogenated solvents, formaldehyde, and 1,4-dioxane.
  5. The inability to identify solvents on the Proposition 65 list that reverse osmosis membranes cannot remove.

Notwithstanding this new information, the City of Ventura continues in its pursuit to be the first to use recycled wastewater for drinking. The water department soldiers on and plans to spend many millions of dollars starting in July 2018 for consultants and a project that may never see the light of day.

The Cost Comparison

with waterThe cost of DPR wastewater is high. According to the Capital Improvement Plan (CIP), the wastewater and water costs will total approximately $538 million once financing costs are added. Included in those costs are advanced purification facilities to treat the wastewater that will cost $77.7 million. Also included is another $170 million to pump the water north to the desalination/Reverse Osmosis plant. Other infrastructure improvements comprise the remaining costs—including a brine line to carry away contaminants from the new RO plant.

By comparison, the pipeline for State Water is estimated by the Ventura Water Department to cost $27 million. That does not include the annual fee for the State Water Pipeline (SWP) entitlement. The city currently pays $1.2 million per year for that option (which the city never used). Over $50 million has been cumulatively paid in annual installments to the SWP since 1972 and will continue until 2035. Every citizen’s water bill includes a portion of that payment. Nor does it cover the additional cost of water pumped through the water line.   Keep in mind that State water can be injected directly into the Ventura water system. The water is reliable and used throughout Southern California.

The Decision Facing The City Council With Water

The City Council will make a monumental decision on water July 9, 2018. They will set Ventura’s water priorities for decades to come.

They will be asked to decide between State Water and DPR as the first supplement to our existing water supply. Their decision will send a message whether Ventura wants to be first with an untested, unproven, unregulated water system with DPR or safe with State Water. We will also learn whether they will listen to the Water Commission or ignore their recommendations.

Finally, we’ll learn how the City Council plans to comply with the Consent Decree. Will they accept scientific findings to divert only 40%-60% of treated wastewater from the Santa Clara River? Or will they ignore the Decree’s exception and insist on diverting 100% at the cost of $400 million?

Editors’ Comments

with waterThe City Council must make a policy decision now and direct Ventura Water to concentrate on the importation of State Water immediately. The current effort to plan, finance and build a VenturaWaterPure treatment plant and RO plant to process recycled water for DPR by 2025 must stop or at the very least be delayed until further study.   We only hope that the City Council has the leadership and strength to change course and not feel bound by this misguided concept of past water leaders.

Protecting public health is paramount. Complying with the Consent Decree is also essential, but we can keep our part of the bargain and adhere to the decree by pumping the water into settling ponds for absorption into groundwater basins such as the Mound basin, then ultimately into our water system.

Lastly, we don’t need to build a desalination plant/RO facility now or in the next five years. However, it should not be forgotten. It will be required in the next 25 years to filter water pumped out of the Mound basin and to filter DPR.   We must prepare our community for that as our population continues to grow.

As for the Consent Decree, we suggest that the City Attorney get to work. Present the fact that the current project is infeasible due to technical infeasibility and lack of regulations and extend the term for compliance beyond January 2025—say 2030. If they do not agree, that is why we have a court that will listen to logic, and common sense hopefully will prevail.

Insist The City Council Makes State Water Ventura’s First Option

Below you’ll find the photos of our current City Council. Click on any Councilmember’s photo and you’ll open your email program so you can write directly to that Councilmember.

Let them know what you’re thinking. Tell them what they’re doing right and what they could improve upon. Share your opinion. Not participating in government weakens our democracy because our city government isn’t working for all of us.

Neal Andrews, Mayor

Matt LaVere, Ventura City Council

Matt LaVere, Deputy Mayor

Cheryl Heitmann

Jim Monahan

Erik Nasarenko

Mike Tracy

Christy Weir

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