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‘Handcuffed’ Valley of the Moon Water District board votes to raise rates

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The anticipated rate restructuring of the Valley of the Moon Water District was approved by its Board of Directors on Jan. 2.

But the moment did not pass without considerable public comment – much of it negative – from a larger-than-usual audience of rate-payers and stakeholders.

There was even exasperation expressed by board members themselves.

Water district board chair Jon Foreman said that, in light of recent court rulings elsewhere in the state, the district had no choice but to restructure its rate system.

“The board, in its frustration at prevailing laws, specifically the San Juan Capistrano lawsuit, felt ‘handcuffed’ to obey the law while still trying to protect our historically low rates, especially for our lower income customers,” said Foreman.

In the wake of the vote, however, the board decided to form a Citizens Advocacy Group to help carry the fight to Sacramento, where legislation is pending that might provide legal cover for higher rates or penalties for customers who use excessive water.

“This Group will work with local Assembly members and Senators and other water agencies to hopefully find a statewide fix that will return flexibility to the local level to have more control over conservation-oriented rates, rather than current limitations (resulting) from the San Juan Capistrano case,” said District General Manager Daniel Muelrath.

The rate change – which eliminates rate tiers that reward low water users and penalizes high water users to incentivize conservation – was required by a 2015 court decision in San Juan Capistrano. In brief, the ruling said customers could not be billed for service charges they did not vote on, ruling it an illegal taxation under Proposition 218.

Muelrath said it was “a serious threat of litigation” that forced VOMWD to propose the rate change. “If (litigation) were to happen it will cost the District and our rate payers hundreds of thousands of dollars in attorney fees,” said Muelrath, as well as a second rate study for up to $70,000 more.

“Moving against our four-tier structure goes against VOMWD staff’s ethos, which was the cause of many spirited debates,” said Muelrath. “However, at the end of the day, the best way to protect our customers was to avoid this class-action lawsuit.”

Muelrath said the San Juan Capistrano decision “turned the industry on its head,” and put many water districts state-wide at risk of lawsuits. This includes the City of Sonoma, which is also evaluating its water rate structure in response to the San Juan Capistrano decision.

There have been several attempts to legislate a solution at the state level that would allow incentives or penalties to water rate users to avoid the San Juan Capistrano quagmire. One was a constitutional amendment offered by state Sen. Robert Hertzberg (D-Van Nuys), and another a bill, SB 623, introduced by Senate Majority Leader Bill Monning (D-Santa Cruz).

Muelrath outlined two potential fixes to the conundrum. Since the state has set a maximum threshold for per-capita water use for all districts – for the VOMWD, it’s 124 gallons per day – the district might be allowed to charge customers an excess fee or penalty when their use exceeds that amount. Another option would be to allow water retailers to apply a simple surcharge on higher users, but both solutions would require legislative action.

The VOMWD has actively reached out to all four state legislators whose districts overlap in the district’s 7,545-acre area of coverage, from Glen Ellen to Temelec. These include assembly members Marc Levine and Cecilia Aguiar-Curry, and state senators Bill Dodd and Mark McGuire.

The rate restructure approved at the Jan. 2 meeting reduces the number of pay tiers from four to two, aligning the two rates directly to the cost of delivering water to customers based on their level of usage. Less-expensive water production from local Sonoma Valley wells is allocated to the lower-use customers, in Tier 1; the more expensive water derived from Russian River water delivered to the district is applied to Tier 2 customers.

The new rates go into effect at the end of the month, with an additional 7 percent rate adjustment on July 1 that further increases the rates. That increase represents two years of increased costs – there was no rate increase last year – and reflects increased wholesale water rates from the Sonoma County Water Agency, as well higher costs due to the district’s own infrastructure investments.

In the wake of the vote, however, the board decided to form a Citizens Advocacy Group to help carry the fight to Sacramento, where legislation is pending that might provide legal cover for higher rates or penalties for customers who have excessive water use. Members include Foreman as the board liaison to the citizens group. District customers Steve Rogers and Rosemary Passantino, both vocal advocates of conservation-oriented water rates, have expressed interest in joining the group.

“I have been against the recent changes to the VOMWD water rates both from the draconian method of pricing with only two tiers and the significant rate hike in July that I do not believe is necessary,” said Rogers.

He added that he would “continue to work toward moving the board to change” but recognized that only legislative methods – or a new state proposition approved by voters – would allow water districts to implement conservation pricing.

“Tiered rates and excessive use penalties are proven to reduce the unnecessary consumption of clean water,” argued Passantino, who pointed out a potential conflict between Prop. 128 and another article in the state constition that “requires that the water resources of the State be put to beneficial use to the fullest extent of which they are capable.” That passage, she said, could be read to allow water districts to use appropriate measures, such as tiered rates and excessive use penalties, as needed, to promote conservation.

An application for Valley of the Moon Water District residents who are interested in joining the Citizens Advisory Group can be found on the agency’s website, www.vomwd.com. Application deadline is Jan. 30.

Contact Christian at christian.kallen@sonomanews.com.