First, thank you to everyone who attended the study session. I listened carefully to the ideas, opinions, and concerns of everyone who spoke and have taken those comments to heart.
The information that was presented, although helpful, raised more questions than it answered.
Bearing the Cost for MWD
Among these, why does the City charge some entities (AT&T, Time Warner, Gas Company, etc.) but not others like MWD to use the City's right-of-way for pipelines? The answer from Mr. Schickling, the Water System Manager, is that MWD is a water wholesaler and not a retailer. The argument used by the City thus far to explain why an "in-lieu-of property tax" fee is charged to the City's Water Fund is that other utilities pay the City to place utilities in the right-of-way and that the Water System is just like the other utilities which burden the City. That argument, however, is not applied to the Metropolitan Water District which has miles of pipelines under Fullerton roadways. There are other utilities with lines buried in Fullerton's streets which the City doesn't receive a dime for as well.
Taxation Without Representation
Another major problem with the franchise fee or "in-lieu tax" is that Resolution 5184 (see below), the 1970 resolution which raised the tax from 2% to 10%, was enacted specifically to pay for services rendered for managing the Water System by "the Finance Department of the City and of the City Administrator, City Attorney, and City Clerk". Therefore, while the resolution says that the 10% transfer is to the General Fund, the resolution also earmarks what the transfer is to pay for. Currently, 80% of this transfer goes to pay for public safety salaries and benefits- that's illegal.
Double Taxation (Without Representation)
Something that does not seem to bother anyone is that Resolution 5184 (see below) says that the 10% transfer from the Water Fund to is to be based on "gross annual water sales". The current practice is to also include the "meter fee" (a fixed fee or tax based on the size of your water meter) as part of the "gross annual water sales". This means you get taxed for the size of your meter and taxed again on 10% of the meter fee as well as the actual water you purchased.
That's sounds like another illegal tax for the Howard Jarvis Taxpayers Association to look into.
No Transparency, No Accountability
All this time I have avoided mentioning the proposed rate increase. In my opinion, we cannot consider a rate increase until we can assess all of the facts and figures. To date those facts and figures have been illusive.
Frankly, the accounting for our water system and the Water Fund has been non-existent for decades and is a complete wreck. This needs to be addressed before we can quantify, much less qualify any increases in water rates.
The water bill needs an overhaul as much as the rest of the water system. And the fees, taxes, charges must all be itemized and transparent to water rate payers.
Is this too much to ask?
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