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Felton Water Situation
A Brief HistoryTod Landis November 23, 2003 The Felton water system is owned by the California American Water Company, or "CalAm" for short. CalAm charges rates that are higher than the rates in the neighboring, publicly owned, water district. According to a recent government report: "A residential or small commercial customer using 20 units of water bi-monthly currently pays $100.60 to Cal-Am and $71.80 to SLVWD" [1]. In other words, CalAm charges about $15 more per month than SLVWD for water service to typical families or small businesses. Two events occurred near the end of 2002, which caused people of Felton, and their neighbors to become concerned. First, the company applied for rate increases on top of its already high rates. The company requested rate increases "for water service in its Felton District by $410,200 or 56.62% in the year 2003; by $101,200 or 8.86% in the year 2004; and by $31,000 or 2.29% in the year 2005" [2]. Second, its parent company announced plans for a merger with RWE, a water and energy transnational corporation based in Germany. Since Germany is a GATT country, this could mean that the state's ability to regulate RWE would be limited. The Santa Cruz Sentinel broke the story on these events and also reported that the county had fumbled an opportunity to protest--and possibly prevent--the RWE merger. It was at this point that many of us became interested in the Felton water situation. I raised the issue at a Board of Supervisors meeting and called for a Town Hall meeting on water, and then helped Supervisor Jeff Almquist organize it. Beginning in late 2002, a series of Town Hall meetings were held, Felton residents filed protests with the PUC., and a public PUC hearing was held. Supervisor Almquist began laying the groundwork for an eminent domain action against CalAm, and he and Scott Millar also worked withresidents of Felton to form FLOW. LAFCO, for Local Agency Formation Commission, approved the extension of the San Lorenzo Valley Water District "sphere of influence" to include the Felton water system. There is a map of the extension of LAFCO's web site (linked below). The next logical step in this process would have been for the supervisor to call for an election to vote on a measure creating the Felton water bond district --and providing some funding for the legal work that will be necessary to start the district and press the eminent domain action. We know that the supervisor was planning something like this, because he laid out plans for forming a Mello-Roos district in Felton public meetings, but we lack the details. Unfortunately, it was at this point that Governor Davis appointed him to the bench, and Supervisor Almquist resigned. Together, the county and the San Lorenzo Valley Water District have spent about $130,000 fighting the rate increase and laying groundwork for the eminent domain action. What's next? A two phase process makes sense. In the first phase, Feltoners would pass a measure creating the assessment district and providing initial funding for an eminent domain action. In the second phase, a bond measure would be passed to provide funding for the actual buyout. Having the assessment district sooner, rather than later, has several advantages. First, Felton could obtain a legal review of the situation--from the residents' point of view--by a water lawyer retained by the new district. This would be a healthy thing to have "going in". Also, it could provide some relief for the count and the water districy, who have been essentially carrying Felton, financially, for work done the will benefit Feltoners financially. The "institutional memory" within the county is now, following the abrupt departure last week of Supervisor Almquist and the the staff member who was handling the Felton water campaign, in a cardboard box. Of course, the County Administrative Officer will be able to help the new supervisor sort things out, and hopefully the SLVWD can help, too. It is important, now to learn as much as we can,now, about what the previous supervisor had planned and what the $130,000 spent on the project, so far, has purchased. It is crucially important for us to learn what work the county has done to establish the value of CalAm's Felton assets. At LAFCO meetings Kevin Tilden says that it will cost Feltoners 10, 20 or 30 million dollars to buy their water system. At other meetings, we've heard that the value of the system estimated at 2 million dollars or so. This is not a case where we we want to split the difference--we need more information You can see that, it may be possible to save money by investing heavily in the preparation of an airtight valuation and then by investing in a legal fight to hold the settlement close to that amount. Useful links Public Citizens "Water for All": http://www.citizen.org/california/water/ Santa Cruz County Government: http://www.co.santa-cruz.ca.us/ LAFCO: http://www.santacruzlafco.org/ SLVWD: http://slvwd.com/ California American Water Company: http://calamwater.com/ More details: .http://todlandis.com/water/ Notes [1] from LAFCO: http://santacruzlafco.org/pages/agendas/090303materials/rate%20table.pdf [2] from CPUC Rate Application A0209032 |
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