BACKGROUND
The City of Yorba Linda sewer system is divided into two separate districts with the boundary near San Antonio Road. The eastern portion of the system, about 42%, is owned and controlled by the City of Yorba Linda. The western portion, about 48%, is owned and controlled by the Yorba Linda Water District.
The City sewer system is a gravity fed system approximately 73 miles in length made up of manhole covers and connecting pipe segments.
The City of Yorba Linda, the operator of the eastern portion of the sewer system, has the right and responsibility to properly fund and maintain the eastern portion of the system. As a City provider, we are mandated to develop and fund a Sewer System Management Plan (SSMP) that prevents untreated or partially treated wastewater to be released into the waters of the United State or create a nuisance. The plan also outlines the steps to be taken if an emergency response is required to protect the public health and the environment.
We are required to perform annual inspections of the sewer system and repair any damage in compliance with the California Water Codes and Regulations.
THE ISSUE
The annual sewer fee is added to the tax bill for single-family dwellings. The western district controlled by the Yorba Linda Water District has been charged $66.00 per year per residence while the eastern district controlled by the City of Yorba Linda has been charged only $19.47 per year. The actual cost for providing the service in the east including a small reserve for repairs and emergencies was calculated to be $86.28. Currently the cost between the actual cost to provide the service and the funds collected is being taken from City General Fund at an annual cost of $500,000. This means that the western district is subsidizing the loss in the eastern district and the city is losing $500,000 per year.
The City cannot raise rates without a state mandated Proposition 218 vote where the City must ask residents for approval to raise the rates. On May 19, 2009, the City Council directed staff to proceed with the Notice of Public Hearing for a rate adjustment. Notices were sent to the affected property owners indicating the proposed rate increase. If 50% +1 of the affected property owners protested the rate increase then the rates would remain at the current level.
At a cost of $3,000 not including City staff time, the notices were sent to about 6,500 property owners. Only 37 protest votes, less than ½% were received.
The Sewer System Management Plan (SSMP), the cost to implement the program and the results of the Proposition 218 vote were presented to the City Council. At that public hearing, members of the community supported the rate increase and no member of the public spoke against the rate increase.
With only 37 protest votes received and no negative public comments, it was obvious that the community understood the value of maintaining the sewer infrastructure and was willing to pay the additional $66.81 per year to do so.
I only received one email from a former City Engineer that questioned the amount of the increase. Judging from the staff report and the consultant’s report, the rate increase was justified.
Mayor Mark Schwing, Mayor Pro Tem John Anderson and Councilwoman Nancy Rikel voted to overturn the community’s approval of the Proposition 218 Vote. Councilman Jim Winder and myself voted to increase the sewer fees as approved by the public. As a result of this decision the City’s General Fund will continue to lose $500,000 per year to make up the difference.
The reason? The majority based their decision on the % of increase rather than the actual amount of money which was reasonable and necessary to help balance the budget for the sewer system and was approved by the public.
At the last Council Meeting on October 20th, a staff report was presented to give away the sewer system owned by the City of Yorba Linda to the Yorba Linda Water District. Mayor Pro Tem John Anderson advanced this idea after he voted against the public approved increase to keep the system operating at a deficit. Giving the sewer system away had not been discussed by the entire City Council in public nor had the staff been directed to study and develop a report on this issue to be presented to the City Council.
MY CONCERNS
- Schwing, Rikel and Anderson voted to overturn the will of the people by voting to continue operating the sewer system at a deficit of $500,000 annually.
- The Yorba Linda Water District would like to take over the system but only if the system is given to them free of charge.
- The sewer system has a potential value in the of millions of dollars.
- The City Council now has asked to study this again:
- Evaluate the value of the sewer system.
- Determine if there are companies that would competitively bid for this system.
- Determine what the community benefit would be to allow the Yorba Linda Water District to assume responsibility for the system. My understanding is that the Water District is planning to raise the sewer rates soon but did not want to do this so close to the large water increases imposed last September.
- Discuss whether we can do another Proposition 218 vote this year to raise the rates to an undetermined amount at the cost of another $3,000 plus staff time.
CONCLUSION
This is frivolous, wasteful spending of taxpayer money that defies the will of the community and will continue to deplete our General Fund.
{ 5 comments… read them below or add one }
Thank you for bringing this to our attention. We live on Via Marisa and I honestly don’t know if we are in the east or wes but I do know that is unfair for one side of the city to pay for the other. I think the rates should be increased. I the YL water district should take over operation it should be done as a managent company @ not as an owner.
Presently, YLWD performs maintenance and repairs to the city owned sewer system, for a fee. It is my understanding that because the sewer system operates at a loss (paid from the general fund) the city has been limiting the repairs allowed, and the system is deteriorating. This must not continue or the city (that means the taxpayers) are going to get stuck with a huge financial liability, and maybe health liability too. Imagine a fire truck falling into a sink hole, only this time it’s not full of drinking water. It may already be the case that the city owned sewer system on the east side of the city has a negative net worth due to years of compounded deferred maintenance. The city lacks the staff, equipment, and expertise to operate and maintain the system. The present fee structure does not fund proper maintenance, so the system, a public asset, deteriorates. Allowing the asset to deteriorate is not acceptable — we need it to remain operating properly and safely for many decades into the future. The rates need to go up to properly maintain the system, no matter if the city continues to own the sewer system, or it is transferred to another qualified and willing owner.
This situation honestly baffles me. The new State regulation that caused this new SSMP development requires that the SSMP be complete and certified by August 2, 2009. Which means that these are new costs that had not before occured and for someone to look at the increase as a percentage shows negligence of the issues at hand. I have trouble understanding how the decision to make the change can simply be overturned and waste everyone’s time here. What assurance could there be if we did go through the $3,000 plus staff time to try to raise the rates that this wouldn’t be overturned again. And if those who had overturned it WERE convinced it seems silly that it would still be mandatory to go through the whole Prop 218 vote all over again when indifference if not direct support of the change was clearly seen.
On a side note… I am not terribly familiar with the system on a city level. How many votes (out of #?) are needed to overturn a Prop 218 decision and why is it able to be overturned in the first place? Shouldn’t a decision that the people make be stronger than a few (while I do understand that a 1/2% response is probably not a hugely reliable)?
I understand the water district is running at a deficit and they had to raise rates. What concerns me? Three Council members voted to overturn the community 218 vote indicating their desire to raise the sewer maintenance rates and maintain the health and safety of our community. This rate would have allowed the City to remain solvent while providing the service they are mandated by the state. The three Council members stated we could go back out for another 218 vote for a lower rate increase. This does not make sense. If the cost to provide the maintenance needed has been established, why would we ask the residents to approve a lower rate that does not cover the costs? We will continue to use the reserve fund to back-fill the cost.
As far as giving the asset to anyone, Water District or other entity, makes no sense. The sewer system is not in bad shape and is an asset the City owns. The City may not want to stay in the sewer business but we should be good stewards with the community’s assets.
All General Services provided in a city (e.g. this sewer system) should be managed/operated by private sector companies, not city governments. An private sector company would make sure that the two sides of the city were paying the same rates (e.g. the higher rate of the two) and that is the most equitable solution. My brother has been a civil servant for the City of LA for over 30 years and I’ve worked for two large, private companies for the same amount of time and in every similar circumstance, the private sector has been more efficient and cost effective than the municipality. This type of “divestiture” would be cost-saving for the city and free up the “calendar” of city councilmembers/managers so they could focus on “real” government issues such as quality healthcare and education. Finally, another thing to think about when the next election comes around…..ending the terms of the 3 council members who voted like they did.