OC Watchdog Bites Down On Fullerton's Illegal Water Tax

OC Register's Teri Sforza wrote this for the OC Watchdog today...

Way back in 1968, when there were still lots of orange trees in Orange County, the city of Fullerton tacked a 2 percent charge onto folks’ water bills to cover the cost of providing that water.

In 1970, the city hiked that charge to 10 percent – and there it has remained for 41 years.
This charge is “in lieu of franchise fees” — what a private company would pay the city for the exclusive privilege of providing water — and in lieu of property taxes, which many special districts collect to help provide water service.

That 10 percent fee generated about $2.5 million for Fullerton last year — and more than $27 million since 1997, according to city figures.

TROUBLE?
“We believe the fee and revenue transfers are illegal,” says a letter from the Howard Jarvis Taxpayers Association, which arrived over the holidays in City Manager Joe Felz’s mailbox.
“If a private company provided water service to the residents of Fullerton, the City could charge the private company a negotiated franchise fee for occupying public rights of way with its pipelines,” say the Howard Jarvis folks. “That is not the case in Fullerton, however, as the City operates its own municipal water utility.  The rates the City may charge are governed by the California Constitution, which limits rates to just the amount required to provide service, and prohibits transferring rate revenue for use elsewhere.

Read the rest of the story here...

Tonight is the Water Rate Study Session at the Fullerton Public Library's Main Branch at 4:30 PM.  Arrive early and expect standing-room only.