Lack of Leadership and Responsibility

A year ago the City of Fullerton was poised to nearly double water rates in order to keep up with the cost of running a municipal water agency.  So what happened?  Public outcry and a serious legal question put the rate increase quietly on the back-burner and out of public debate, at least until now.

The thought of a double-digit rate increase brought the issue to the forefront of Fullertonians’ minds. 

The legal question was raised when the Howard Jarvis Taxpayers’ Association reviewed the City’s Water Fund franchise tax and pointed out that the blanket 10% fee that the City was skimming from the Fund was inconsistent with California ’s Proposition 218.  In essence, the City would skim 10% of the Water Fund’s $25-million and use it to back fill the City’s General Operating Fund, nearly 80% of which pays for benefits and salaries.  There was no justification for the tax, which was implemented in the 1960s, nor was there ever any accounting as to how the money would or should be used.

Typically, franchise fees or franchise taxes are levied by municipalities against other utility companies as an in-lieu fee for property taxes.  Think of it as the City renting out a strip of the city’s street for buried electrical line or cable TV line.  Fullerton ’s water utility is one and the same as the City of Fullerton . 

City staff have indicated that they are wrapping up a study to see just how much money they can justify taking from the Water Fund.  Under consideration is the City’s loss of property tax revenue and potential leasing fees for each of the City’s reservoirs.  This after-the-fact attempt to justify decades of skimming, now valued at $2.5-million per year and growing, is a slap in the face of rate payers.  The sting is particularly bad when one realizes that the other side of City Hall, our water utility has been unable or unwilling to provide detailed meter costs.   

The Fullerton City Council’s lack of leadership and clear direction has allowed City Hall to get by skimming the Water Fund and not having to articulating the true costs of operating, managing, and maintaining the City’s water system in a transparent and open manner.  This lack of leadership and accountability is just one more reason to consider recalling Dick Jones, Don Bankhead, and Pat McKinley.