9/24/2012 & 9/13/2012 AWA Board Meeting Minutes

  • Upcountry Tax to Pay for GSL (9/24/2012)

    After voting to increase water rates at its previous board meeting, the AWA Board voted to notice their intent to form a Mello-Roos special tax assessment district to pay for the Gravity Supply Line (GSL). If approved, the district will tax upcountry property owners to pay for the GSL. The annual tax will vary from $86/year for a typical residence, to as high as $860/year for properties that are 50 acres and larger. There will be a public hearing on October 25th at 9:00AM. Affected property owners and voters can protest the tax at or before the hearing with a tax protest form.

    A Mello-Roos special tax assessment is a way for government entities to circumvent Proposition 13’s limits on property taxes. In this case, AWA wants to tax the owners of upcountry properties it serves, as well as owners of unimproved lands. This tax must be put to a 2/3 majority vote, but it can also be stopped with a protest before it ever reaches the ballot. This is important because owners of unimproved lands who do not live in the district will not have a vote if it goes to the ballot (because they are not registered voters in the district). They will have no representation if the tax goes to a special election.

    Luckily, there is a way for both property owners and voters to protest the formation of the assessment district before it goes to a vote. If more than 50% of registered voters, or landowners of more than 50% of the area of the proposed district, protest the formation by October 25th, AWA must delay the assessment proceedings for one full year. If the number of protests is below 50% in both cases, a special election will be scheduled for next year to vote on the tax. At that special election, if more than 1/3 of voters who live in the district vote against the tax, it will not go into effect. Landowners who are not registered voters in the district will not be able to vote in that election.

    If you are registered to vote and get upcountry water service from either Amador Water Agency, Rabb Park CSD, Pine Grove CSD, or Mace Meadows CSD, you are in the proposed district and can protest. If you own land (developed or undeveloped), you can refer to the following documents provided by AWA to see if your property will be taxed:

    If you are not sure, contact AWA to see if your property is in the proposed assessment district.

    To protest the special assessment, download a tax protest form and return it to RPA.

  • AWA OKs Rate Increase Notice

    On September 13, the AWA Board approved a rate increase notice and agreed to have an evening hearing on the System-Wide Cost of Service and Water Rate Study. The study shows some water rates will go up by 45%. The board did not set a date for the hearing and gave AWA staff full discretion as to when and where the hearing will be held and when to send out the notices. An attendee asked for a rough date to expect the notices in the mail. No one answered the question.

    AWA consultant Bob Reed presented the fourth version of rate tables for the rate study that will increase costs to ratepayers by $7,000,000 over the next 5 years. Mr. Reed did not provide a rate study to justify the rates in the tables. Reed said the rates were adjusted for an incorrect $19,000 Plymouth Pipeline charge to the City of Jackson. That charge will be removed from Jackson’s costs and instead charged to other ratepayers in Ione, Amador City, Plymouth, Drytown and Sutter Creek.

    Back in 2007, Reed said that Jackson receives no benefit from a pipeline that goes to Plymouth, and therefore should not pay towards it. . This year he said he was mistaken and “the system-wide consolidation concept” meant that Jackson should contribute. Reed cited indirect benefits to Jackson of Plymouth participating in the AWS system, including Plymouth paying part of the debt service on the Amador Transmission System pipeline, and for the operation of the treatment plant. After the Jackson City Council objected, Reed reverted to his first opinion.

    At the Tanner Treatment Plant on Ridge Road, water goes in three directions. One pipeline goes south to Jackson. Another goes north to Plymouth. The third takes untreated water to Ione. Jackson does not have to pay for the water going to Plymouth via the Plymouth pipeline. However, Ione water users are paying costs of the Plymouth pipeline and it provides no benefit to them either.

    AWA and its consultants apply different rules to different people. Ione was consolidated with the Amador Water System years ago. AWA says that the costs of the different systems will be kept separate, but Ione is paying for a project for Plymouth. AWA does not account for the costs of operating the different systems now, and that lack of accountability will just be worse when more systems are consolidated.

    Customers in LaMel heights will have a $15/month reduction from the last rates that Reed presented. General Manager Gene Mancebo explained that the charge is not consistent with the rate structure methodology. LaMel water ratepayers have been paying the charge for several years. Mancebo did not explain how the LaMel budget would make up the $10,000 annual shortfall from removing the $15 charge, or why the charge was imposed if the ratepayers do not benefit. LaMel is completely separate from all other systems. How can consolidation with those other systems suddenly transfer $10,000 in costs to those other systems? This is one more example of consolidation resulting in confused and unjustified costs.

  • Consultant Explains Upcountry Tax

    On September 13, SCI Consulting Group explained the Gravity Supply Line (GSL) community facilities district (CFD) to the AWA board and public. AWA intends to impose a Mello-Roos tax on upcountry property owners of $86 per year to pay for the GSL. The presentation explained costs with and without the CFD, and how rates would be affected by the CFD. In their presentation, SCI predicted that the CFD will reduce costs and the reason for the decrease in costs is due to the reduction in electricity for pumping water to the Buckhorn Treatment Plant. Like all other current financial reports, SCI was basing their prediction on the budget and not actual costs.

    According to AWA, the median customer usage results in a cost of $3.95 per month for pumping. The tax for the CFD is $7.17 per month (but will be paid bi-annually on the tax bill). Bill Condrashoff asked how replacing a $3.95 pumping charge with a $7.17 tax can possibly result in a lower cost. A consultant explained that it was more complicated than that, but did not justify his claims with numbers. The AWA Board did not ask for an explanation.

  • AWA Amends Proposition 218 Procedures Again

    AWA’s attorney found even more problems with the Prop 218 procedures that his firm presented to the AWA board earlier this year. This was the second time the procedures have been amended since they were adopted in March. The changes were made because the previous procedures did not give proper notification to all eligible protesters and required information on a protest form that a potential protester had no way of knowing.

    No complaints were made concerning the three Prop 218 protests that took place in 2009 and 2010. But the Directors authorized an $80,000 slush fund for General Manager Mancebo to tap. Mancebo and Agency Counsel Steve Kronick did just that, and came up with a procedure making it harder for ratepayers to protest higher fees. The frequent changes caused RPA to wonder why counsel did not properly research the matter in the first place. AWA has taken the position that the public has no right to know anything about the specific work being done by AWA’s attorney. “It seems to be the ratepayer’s responsibility to keep the slush funds fluid, no matter how many times the staff have to do their work over,” commented Ken Berry. “Last meeting the Board decided that staff could work on whatever they wanted, whether it was budgeted or not. I can see why the Directors do not want the public to know how their rate money is being spent.”