In 2013, EID’s 950 agriculture water rate recipients collectively consumed 20.2 percent of EID’s sold water. Most all agricultural water currently is sold at $49 per acre-foot while residential ratepayers pay $829 per acre-foot for water consumption over .6 acre feet annually.
In its Local Agency Guidelines for Compliance with Proposition 218, the Association of California Water Agencies states, “Article XIII D (i.e., Proposition 218) makes no distinction for agricultural water. Thus, domestic, municipal and industrial, and agricultural water should be analyzed using the same tests.” The Howard Jarvis Taxpayers Association, authors of Proposition 218, go on to state, “To the extent that tiered water rates are imposed in a manner that deviates from ‘cost of service’ requirements, those rates are in violation of Proposition 218. Local governments which do not abide by the requirements of the new constitutional language do so at risk of litigation.”
Yet rather than follow ACWA guidelines and have agriculture customers pay their proportional 20 percent share of EID’s water-related debt costs, EID’s politically driven rate structure assigns a mere 2 percent of EID’s water-related debt costs to agriculture ratepayers. Because EID’s agriculture rates reflect a one to 10 disproportionality in assignment of debt costs, EID’s 39,000 non-agriculture water users are absorbing more than $4 million dollars annually of extra debt costs to subsidize EID’s 230 agriculture and 720 residential small farm ratepayers. This $4 million over-assignment of debt costs to regular ratepayers adds 15 percent to the water bills of EID’s 39,000 residential, commercial and recreational turf ratepayers.
Ignoring this grossly disproportionate 2 percent vs. 20 percent debt cost assignment which was constructed using totally dissimilar tests, and thereby violating ACWA’s rate assignment guidelines, EID’s general manager and general counsel are adamant that EID’s rates fully comply with Proposition 218. Rather than following the legal requirements for cost-proportional rates, both men take the position that EID compliance with Article 13 D of the State of California Constitution and with ACWA guidelines are subject to override by board vote politics.
I most vehemently disagree. When I took my oath of office to adhere to the State of California Constitution, I did not have my fingers crossed. The law is the law and the numbers are the numbers.
Board Director Dale Coco of Division 4 asked in the April 10 EID board meeting that the current board quickly review and validate that EID’s current rates comply with Proposition 218. I earnestly pray that Director Coco didn’t have his fingers crossed when he took his oath of office and that he stand with me to re-do EID’s cost of services and obtain cost-proportional, legally compliant rates for EID’s 39,000 regular ratepayers.
In closing, I reiterate that I am supportive of ways to mitigate water costs for the agricultural ratepayers who are legitimately and materially in the commercial business of agriculture. But I most certainly am against extending agricultural rates to the 540 new entrants to the residential small farm rate category that EID management wrongly allowed in the last two years.
EID Director, Division 2