Voice of the Coast

With gasoline prices over $3 per gallon and winter heating bills expected to soar due to soaring natural gas prices, Coastside residents will be hit with yet another increase. The elected Board of the Coastside County Water District (CCWD) recently voted to raise water rates by 15%.

The rate hike will be used, among other things, to pay for major water system projects, a 27% increase in projected employee salaries, and a 30% increase in projected employee retirement benefits.

The water district’s employee retirement plan is already generous. The district contributes 14.5% percent of each employee’s salary toward the pension plan with no need for any contribution from the employee. Employees become vested for lifetime pension payments after only five years of service, and employees may retire as early as age 50.

Budget? What budget?

The mailed notice for the required September 13 hearing on the CCWD 2005- 2006 budget listed the district’s website as a source for the budget.That budget would have disclosed large increases in salary and benefits, as well as other data necessary for the public to judge whether the proposed rate hike was reasonable and necessary.

Unfortunately for ratepayers, the details of the proposed budget never appeared on the website during the 45-day period leading up to the hearing.

Despite the lack of public information, CCWD’s board of directors pushed ahead with the rate increase. District officials have not responded to a written request for data on employee salary and retirement payments from previous years.

Swimming in cash

CCWD’s budget data shows that the district is sitting on over $4 million in unrestricted cash reserves. At the September 13 hearing, the Board voted to fund new water system projects from cash reserves, and to raise rates to replenish the reserves. In effect, the Board’s action forces current customers (whose bill payments have built up reserves) to foot the bill for water system projects serving future housing developments.

This is unsound public policy. Basic fairness requires the cost of infrastructure projects to be spread evenly across current and future residents. The standard practice of achieving this beneficial cost sharing is to finance infrastructure projects through long-term municipal bonds, repaid over time by current and future water customers.

In contrast, CCWD’s plan forces current residents to subsidize the cost of delivering water to future housing developments. Besides being unfair, CCWD’s plan raises serious questions of legality: Half Moon Bay’s certified Local Coastal Program requires water supply facilities to be developed so as to “minimize the financial burden on existing residents and avoid growth-inducing impacts.”

A history of expansionism

The tendency of special districts like CCWD to pursue growth-inducing infrastructure projects has a long history on the Coastside (see sidebar). From 2001 to 2003, the water district spent thousands of dollars in legal and consulting fees trying to strong-arm the California Coastal Commission into approving a new 16-inch water supply pipeline through El Granada.

Unfortunately for the expansion-minded directors at CCWD, the Coastal Commission staff concluded that the pipeline might be oversized and growth-inducing, and so potentially in violation of the City and County Local Coastal Programs. The December 2003 Coastal Commission staff report points out:

“CCWD has not presented a clear statement of the capacity of the proposed 16- inch pipeline in terms of the maximum volume of water that the proposed pipeline would be capable of delivering.

“Since CCWD did not identify the maximum capacity of the pipeline,...it is unclear whether the pipeline is appropriately sized because it might be able to accommodate additional water, which could serve additional demand.”

To guard against the growth-inducing impacts of the 16-inch pipe, the Coastal Commission forbade CCWD to increase the number of water system connections beyond the current phase unless the rest of the Coastside infrastructure (roads, sewer, and schools) can handle the level of development served by an expanded water system.

Unsurprisingly, the developer-friendly directors at CCWD, with the aid of a hired lawyer, have been working to undo those conditions during the ongoing updates of the Half Moon Bay and San Mateo County Local Coastal Programs. CCWD’s own 2005 financial statements show that the district has been spending over $10,000 per month on legal fees.

The voice of the public

It’s fair to say that all five members of the current CCWD board share the same pro-development vision. An independent voice on this board is needed to protect the interests of current Coastside residents, an independent voice like Jim Marsh.