Letter: Can anybody at all explain the Montara Water rates?

Letter to the editor

Posted by on Thu, November 8, 2007

So I have called the Montara Water and Sewer district and got no return phone call, and I then emailed Kathryn Slater-Carter and Scott Boyd, and nobody will answer my simple question.  My question was, "I got my tax bill, I pay ~$800 for the bond, and another ~$700 for another MWSD charge that is not explained anywhere.  What is this charge and how is it calculated?" 

Ms Slater-Carter and Mr Boyd offered to meet me for coffee to discuss instead of simply answering the question.  I don’t have time to go meet them as I work over the hill.  ~5 years ago, when I originally was told that the MWSD purchase was going to save me money, I thought, "great, I pay too much to Cal-Am" as the sales pitch was for rate hikes to be eliminated, or minimized by Cal-Am not selling to the German company.  Now, including my monthly charges (of which about $15.- to $20.-/month is water), I pay over $200 EACH MONTH!  10% of my total monthly bill is for the actual water.

I know that there has been talk recently of raising rates.  A few months ago, a polite woman was asking people to sign a petition at the post office one Saturday.  She said that one of the MWSD directors was yelling at her earlier that morning, telling her that she, "Was ruining everything".  All she asked me to do was to sign a petition to prevent sewer rates from going up 35% or something like that.  I don’t know how accurate her story was, but I do know that I’m paying way too much for water and sewer, so part or maybe all of her story was accurate. 

Can anybody explain why we all pay so much?  I can’t get any answers from the MWSD people.  How much are rates going to keep going up?  I also don’t want to hear that I can deduct the bond from my taxes as I still have to pay it.


Comment 1
Thu, November 8, 2007 2:01pm
ScottBoyd
All my comments

Yes, I did offer to sit down with Nick.  I, too, work over the hill, and I’m willing to make the time.  Nick’s email raised quite a number of issues (more than just asking for an explanation of the two charges), and face to face is often a great way to cover a lot of ground quickly.  It takes time, but it’s worth it for matters this important to the community.

Just this week, in a discussion with a neighbor about the bond payments at the Moss Beach post office, I asked, “Do you know how your sewer service gets paid for?”  Like many people, the answer was, “No, how does it?”

OK, a little background.  The property tax bill is where two different MWSD charges are collected.

In the Special Charges section is the long-standing “Montara Sanitary Dist” item. 

This is the Sewer Service Charge.  This is not a tax.  It is a usage fee.  It pays for use of the sewer system, a system which requires operation, cleaning, repair, and replacement (e.g., the pump station that is being rebuilt near the old Chart House).  The Sewer Service Charge varies by household, and that’s because it is based on water usage during the wet weather months.  The idea is to focus on water that goes into the sewer system (excluding water used outdoors for landscaping and such).

In the Taxes section is the newer “MONTARA SANI BOND SER 2003”.

This is the bond voted on and authorized by the community when Measure V was on the ballot and received 81% approval.

The bond money was used to purchase the system, and to make many repairs and improvements to the system.  A number of those improvements are documented in the District’s newsletters, available as PDFs on http://mwsd.montara.org

(continuation below)

Comment 2
Thu, November 8, 2007 2:07pm
ScottBoyd
All my comments

Nick wrote to me that his understanding prior to the Measure V vote was that “a company was going to buy the district from Cal-Am and up my rates by a huge percentage.  And that by voting for MSWD to own it, I would benefit greatly.”

That’s correct.  At the time, using the best information available, things like the Cal-Am master plan, and representations they were making before the California Public Utilities Commission (CPUC), we estimated (conservatively) what this would do to costs.  We also estimated (conservatively) what buying the system would do to costs.  The buy-vs-rent decision had a pretty clear answer after comparing the two scenarios, and the voters agreed overwhelmingly.

Since the acquisition, rates in other Cal-Am districts have indeed continued to skyrocket.  Cal-Am has continued to propose projects which would allow them to spend vast sums and reap handsome rewards, even on the backs of such small communities like Felton (where the community has rejected at least one large project as unnecessary and having little benefit, while costing an arm and a leg).  Felton continues to work very hard to purchase their water system, just like Montara/Moss Beach did.

Since the acquisition, rates in our district have been held to largely cost-of-living increases.  There are some things we have little or no control over, of course, such as PG&E;rates, insurance costs, and the like.  Even so, we have taken steps.  For example, we have installed solar at our 8888 Cabrillo Hwy facility, and will be installing solar soon at the Alta Vista facility, reducing costs and providing some emergency power when PG&E;loses power.  We have also, both at the staff level and the board level, carefully weighed and adjusted options on insurance coverage.  Some things can’t be controlled, but pro-active efforts can keep them in check.

There is no question that the purchase cost money.  The community voted to take on the additional taxes as an investment for long-term savings.  Money that used to go out of district for profit and taxes has been going into improving the system, and that has the additional benefit of reducing the cost of operations.

About the “talk” of rate increases, a little background.  This year, because of a California Supreme Court ruling, water districts and sanitary districts have changed how service rates are set, greatly increasing the public participation.  The board held several public meetings, and a number of community members came to the meetings and participated.  Since we provide three different types of service (water, sewer, trash), we conducted three separate sets of public hearings.

I appreciate that not everyone can make the time to attend meetings, but for those who can, the board meets twice a month on the 1st and 3rd Thursdays at 7:30 PM at 8888 Cabrillo Hwy.

Scott Boyd
Director, Montara Water & Sanitary District

Mr. De Beer’s letter raises an interesting question I would like the Montara Sanitary District Management to respond to.
Months ago I had a similar verbal exchange with the board in this forum and got similar, mostly evasive and later offensive answers.
Anyway here is the question.
A bond is a fixed sum of money, which has to be paid back on a pre-arranged schedule by the number of people who assumed the debt and should not be influenced or change when the property it is tied to changes hands.
In fact it should be equal for every homeowner in the area.
Why is it, that the Montara Sanitary Bond is a function of the assed value of the property?

Comment 4
Thu, November 8, 2007 5:51pm
ScottBoyd
All my comments

This is similar to how other elements of municipal services are paid for (streets, police, schools, etc…).

Here is the question put to the voters of Montara and Moss Beach in 2001:

http://smartvoter.org/2001/11/06/ca/sm/meas/V/

“Voters should note that estimated tax rate is based on the assessed value of taxable property on the County’s tax rolls, not on the property’s market value, which could be more or less than the assessed value.”

The voters of our community passed the bond with 81% approval, overwhelming support as bond measures go.

Here are a few more thoughts on this subject:

Measure V authorized up to $19,000,000 in bonds to be sold by the Montara Water and Sanitary District. The Board of Directors kept the actual bond issue to $17,500,000, which resulted in an 8% lower tax rate immediately.

The Tax Rate Statement from the bond measure (see link given above by Scott Boyd) estimated that the tax rate would be 24.4 cents per $100 assessed valuation in 2003/2004, and that the highest tax rate would be 24.4 cents per $100.

The actual highest tax rate was 16.85 cents per $100 in fiscal year 2004/2005. Rates have come down every year since then. For the current year, FY 2007/2008, the rate is 13.50 cents per $100.

The assessed valuation within the District has increased at an average annual rate of 7.25%. Although past performance cannot predict future trends, and the current crisis in the mortgage market may affect assessed values in the short term, if we project the historic rate to 2012, we might see a tax rate of about 10 cents per $100.

In my opinion, the MWSD Board has acted to keep costs to the community both on your property taxes and in your water rates as low as possible.

After acquiring the water system, we instituted tiered water rates (similar to Coastside County Water District and North Coast County Water District). The base tier residential customer today pays only 10.9% more per hundred cubic feet of water than in August 2003. Rates in the surrounding districts have gone up 33.5% for CCWD and 52.5% for NCCWD during the same period.

Paul Perkovic, MWSD board member

Interesting that the rates for CCWD and NCCWD have gone up that much.  Let’s do som big picture math. For the “water” part of the bill, if the actual water charge part of the bill goes up by 50%, I pay an extra ~$10.-/month (I only use about $20.- worth of water per month).  When I add up all of the 3 charges (the monthly bills, the bond, and the sewer charge) that I actually pay ~$2500.-year.  So, in 4 years, I have paid over $10,000.  An extra $10.-/month equates to a generous extra $500 over 4 years.

How much do the surrounding areas pay total, for everything, compared to what we pay?  When my wife lived in Mt View a while ago, she was paying significantly less, like maybe $20.-/month, and I can’t recall the sewer charges, but I’m sure that they weren’t over $180.-/ month.  Assuming that Mt View was $50.-/month total for water and sewer, that is still less than 75% less than what I am paying now.  When the bond is paid off, it seems to me that we will still be paying significantly more than the surrounding areas.  Unless I am missing something and the surrounding areas pay about $2500 per household.

BTW, my house is ~1600 square feet and my lawn is not very green as I don’t water it that much.  We only run the dishwasher when it is full, and we generally don’t waste water…

Nick deBeer, customer.

Mr. deBeer,

Let’s address your Sewer Service Charge first.

A comparison with neighboring areas will require some research, which cannot be done over the weekend. (Granada Sanitary District has a website, but it does not show its sewer service charges; the City of Half Moon Bay also has a website, and the Public Works page mentions Sewer Charges, but there is no link with information.) These are our partner agencies in forming Sewer Authority Mid-Coastside, which handles the actual wastewater treatment and disposal for all three agencies. I do not happen to know their charges.

Scott Boyd explained the Sewer Service Charge in an earlier response to your posting. For Fiscal Year 2007/2008, the average Montara Water and Sanitary District (MWSD) residential sewer customer pays $439.06, or $36.59 per month. It appears that your Sewer Service Charge is $713.46, or $59.71 per month.

You can reduce your Sewer Service Charge for next year by conserving water right now - between November and March. The water consumption by your property last year was significantly above the community average.

I suggest you make some telephone calls around to neighboring agencies, or others in the Bay Area, and investigate how your Sewer Service Charge compares to those in other parts of the peninsula.

Keep in mind that different agencies have different methods of paying for wastewater collection and treatment, but everyone who has sanitary sewer service pays for that service through one mechanism or another.

MWSD’s sanitary sewer service operations have been in existence for decades and are independent of the ownership of the water system. So let’s keep water and sewer costs separate, so we are comparing similar services.

Paul Perkovic, MWSD board member

Mr. deBeer,

Let’s turn next to the Measure V bond. This will require two parts. First we will examine your property tax payments for the Measure V bond and your benefits. In a subsequent comment, we will explore the benefits properties on wells receive from community ownership of the water system.

What are your effective bond payments?

As an example, if you owned your home prior to August, 2003, before the Montara Water and Sanitary District (MWSD) acquired the water system; and if overall assessed valuations continue to rise (as I explained in an earlier posting in this topic); and if your assessed valuation remains the same; then your total payments over the life of the bond will be about $12,500. This comes out to an average of about $500 per year. (These are rough estimates only. For readers other than Mr. deBeer, the numbers vary depending on your own assessed valuation.)

In general, property tax payments are deductible on both State and Federal income taxes. I have no knowledge of your income or individual tax status. However, given the cost of living in our area, it is likely that your marginal State tax rate is 9.3% and that your marginal Federal tax rate is at least 25%. (If much of your income is from dividends and long-term stock gains, your rate might be lower.)

This means that $1.00 paid as a deductible amount is equivalent to $0.66 paid with after-tax money, for many customers in the District. Thus an average annual bond payment of $500 is really equivalent to $330, or $27.50 per month, if you were paying this acquisition cost with after-tax money as part of your water bill.

For this investment, your property receives the benefit of a community water and fire protection system. Your homeowner’s insurance premium is based on an ISO rating class 5, which depends on availability of a suitable fire station within 5 miles of your residence and a hydrant within 1000 feet of your property.

Without a community fire protection system, your ISO rating class would be 9 or 10 (“unprotected”). You might call your own insurance agent next week and ask her or him to compare the premium you pay today, with the benefit of a fire protection system, against the premium you would pay for an ISO class 9 or 10 property.

Paul Perkovic, MWSD board member (writing his own opinions)

What about properties that do not currently receive water service from Montara Water and Sanitary District (MWSD)?

Property owners in the community who are not currently connected to the water system for domestic water service also benefit directly from the availability of a water system for fire protection. Prior to Measure V, those property owners received the fire protection benefit but paid nothing. Instead, the full cost of the water system was borne by just the water customers.

Long ago, when Citizens Utilities had sufficient water resources to meet the needs of the community and nearly every property was a water customer, it was fair and reasonable for the entire costs of the water system to be paid only by connected customers - because everyone was connected to the privately owned water system.

During the decades of mismanagement by Citizens Utilities, when the Department of Health Services and the California Public Utilities Commission imposed a moratorium on new connections, San Mateo County allowed continued development in the community using private wells.

Homes on those wells - some for nearly 30 years - received the benefit of the fire protection offered by the water system, but paid none of the costs. They were being subsidized by Citizens Utilities ratepayers.

Measure V allowed the entire community to take the water system public, so we can meet our own needs rather than those of stockholders. The water system is a municipal resource or service, like schools, parks, or the fire department. Measure V clearly spelled out the financing mechanism and was overwhelmingly adopted by the community. It provides a fair method of sharing the costs of acquiring and improving the local water system.

Paul Perkovic, MWSD board member (writing his own opinions)

Comment 10
Sat, November 10, 2007 9:01am
Tracy Usher
All my comments

Scott Boyd made this statement:

The Sewer Service Charge varies by household, and that’s because it is based on water usage during the wet weather months.  The idea is to focus on water that goes into the sewer system (excluding water used outdoors for landscaping and such).

If I understand correctly, the sewer rate is determined by looking at how much water a MWSD customer uses during a time of the year where it is presumed the bulk of the usage is indoors (therefore being “returned” to the sewer system).

If this is correct then how are the rates determined for those customers hooked to the sewer system but on private wells? Is there a formula for estimating their usage based on square footage, or number of bathrooms, or?

Thanks,

Tracy Usher

Granada Sanitary District’s Sewer Service Charge (SSC) for single family residential is currently $314/year—flat rate, not based on usage.  ($314/year = $26.17/month.)  GSD’s rate is lower than the average residential rate of the other 2 members of the Sewer Authority Mid-Coastside for a couple of reasons, the most notable of which is, as our General Manager said “GSD has a dream topology”.  It’s [mostly] a bowl-shaped territory, and we all know what flows downhill.  I’ve been told that one reason that MWSD’s sewer costs are higher is that due to the numerous hills in the territory, many lift stations are required, and lift stations are expensive to operate and maintain.

My recollection from a year or two ago is that HMB’s average SSC for single family residential was somewhat over $400/year.  It was increased for this year but I don’t remember what it is.

I’ll probably have to create a new page on the GSD web site to list fees and charges; thanks for pointing out that this info should be online.

For those who think that sewer charges are high on the Midcoast (includes HMB), here are some things to consider.
- Some big cities have lower charges.  Many many areas larger than we are have higher charges.
- County-run <u>sanitation</u> districts (no locally elected board, in comparison to our <u>sanitary</u> districts with a locally elected board) have rates which much more often than not are 2-5 times ours.
- We live next to a federally-protected marine reserve.  We have to invest more in making sure that we don’t pollute the Reserve.

Historical footnote:  When I took office at the end of 1997, GSD’s SSC was $365/year.  2 years later we cut it to $273.50/year.  A couple of years ago when the State increased their theft of our local property tax money we had to go back up to $314/year to compensate, still much lower than it had been in earlier years.


Leonard Woren, GSD Board member (writing his own opinions)

Comment 12
Sat, November 10, 2007 3:48pm
Nick deBeer
All my comments

Mr Woren,  I appreciate your explanation.  It is thorough and clear.  Quick question: Did the voters vote for the flat rate charge?

CORRECTION

In my earlier posting on Montara Water and Sanitary District (MWSD) Sewer Service Charges (SSC), I stated: “For Fiscal Year 2007/2008, the average Montara Water and Sanitary District (MWSD) residential sewer customer pays $439.06, or $36.59 per month.”

It turns out that I had referenced the incorrect amount. The sentence above is correct for the minimum, not the average. The minimum Sewer Service Charge is based on 16 hundred cubic feet (HCF), or about 12,000 gallons, used during the four wet-weather months.

The correct figure for the average SSC is $631.14, or $52.60 per month. This represents the SSC for the average water usage of all water system customers in the District, which was 23 HCF over the four wet-weather months. (And thus Mr. deBeer’s usage is only slightly above average, not significantly above average.)

Please accept my apologies for citing the incorrect number. (This is one reason that my responses are not “official” statements of MWSD; they have not been reviewed by staff, our attorney, etc., to check every detail.)

Paul Perkovic, MWSD board member

Tracy Usher asks:

How is the Sewer Service Charge (SSC) determined for customers who are currently on private wells?

Because the Montara Water and Sanitary District (MWSD) does not have actual water use measurements for sewer customers on wells, we currently use the average residential water use (just cited in my comment above) to determine the SSC for properties on wells. The Board established this policy many years ago, as it seemed the fairest way to estimate usage when no accurate figures are available.

Historical Note

It is my understanding that, prior to voter approval of Proposition 13, sanitary districts typically simply set a tax rate necessary to produce the revenue to cover operating costs. Subsequent to Proposition 13, sanitary districts generally converted to fee-for-services funding (using the Enterprise Fund model). This was a requirement of some of the Clean Water Act grants made to Sewer Authority Mid-Coastside when the original consolidated wastewater treatment plant was completed in the early 1980s.

Individual districts have chosen different payment models. MWSD bases our SSC on approximate wastewater flow from each premise, together with a “strength factor” that adjusts for differences between residential and other wastewater producers, such as restaurants. Some districts, like Granada Sanitary District, have a flat charge for all residential users.

Thanks to Mr. Woren for explaining one of the main reasons that the MWSD SSC rates are higher than in Granada Sanitary District.

Paul Perkovic, MWSD board member (writing his own opinions)

Regarding GSD’s flat rate for residential, Nick deBeer asked “Did the voters vote for the flat rate charge?”

I doubt it, but that’s simply speculation because it’s been that way for longer than I’ve lived here, and I haven’t read all of the old board meeting minutes.  GSD does charge non-residential customers based on water usage.  (GSD uses a strength factor for non-residential customers, as Mr. Perkovic described above.)

Personally, I’d like to revisit the residential flat rate, but in the 10 years that I’ve been on the board the other directors have not been interested in even discussing it.

From my review of some old old minutes (so old the staples are rusty), I suspect that charging according to usage never came up.  Once upon a long time ago there was no SSC—costs were paid completely from property taxes.  When they starting planning for construction of the SAM system in the late 1970s, post Prop 13, they needed some money and put in a very small per-customer charge, I think on the order of $1-2/month billed monthly.  Some people were quite upset at that.  My guess is that over time as costs went up but property taxes were basically capped, that flat charge continued to be incrementally increased without any consideration of restructuring to base it on usage.

As to those on wells, the County’s Well Ordinance requires that every owner of a well submit a report annually to the County of the water usage from the well.  The County does not enforce that clause.  I don’t know why they don’t.

Comment 16
Sun, November 11, 2007 2:54pm
Barb Mauz
All my comments

Taking a look at Paul Perkovic’s recent comment on Review’s “TalkAbout” below, I am totally dismayed that Supervisor Richard Gordon/County has held hostage MWSD’s Failed Well Policy by tying it into, and making it dependent on the Coastal Commission’s approval of County’s exploitive, fraudulent “LCP Update” that based all of it’s assumptions for doubling the amount of houses, people, cars and out-of-scale expansions of water/sewer infrastructure, water supply additions, road expansions & urbanized park/rec plans on their old, over-estimated LCP Buildout Numbers from the 1980’s that do not even include the hundreds, if not thousands of Antiqated 25’ Sub-Standard Lots that the County intends to use as sites for “Affordable Housing”.

Please note that the County should NOT have included “Affordable Housing” as a part of their so-called “LCP Update” because it will greatly increase the intensity of the Mid-Coast’s Land Use Plan. Take a good look at what is included in County’s General Plan Amendment to the Housing Element - Chapt. 14 - “Affordable Housing”!

Included in both County’s “LCP Update” & their General Plan Amendment is the detmn. that 3,500 sf lots or larger yet, under the 5,000 sf Zoning Lot Minimum Requirement for El Granada, Priceton, Moss Beach & Montara will be considered “BUILDABLE AS A MATTER OF RIGHT”!!!

Fax letters to the Coastal Commission c/o Ruby Pap at (415) 904-5400 and request that the Commission remove County’s jurisdiction over the Mid-Coast’s LCP & LCP Update BEFORE their Public Hearing in SF in December. /Barb Mauz

Paul Perkovic wrote:

Kathryn Slater-Carter succeeded in getting the appropriate language that will enable the Montara Water and Sanitary District (MWSD) to issue priority water connections to properties on failed wells into the San Mateo County Local Coastal Program Update process.

The decision of whether to pursue this issue as a separate stand-alone amendment, rather than including it with the complete package of Midcoast LCP Update amendments, was made by San Mateo County.

I suggest you direct your question to Supervisor Richard Gordon. His telephone number is 363-4569. You can ask him yourself why the County chose to include the priority provision in the LCP Update package, rather than submitting it as a separate amendment.

Please let the community know how he responds to you, preferably by posting a copy of your correspondence and his response.

Paul Perkovic, MWSD board member (his own opinions still)

Comment 17
Mon, November 12, 2007 1:13am
Barb Mauz
All my comments

In addition to my previous comment - take a good look at the County’s “Map of Development Potential for the Midcoast with Watershed Information” - Miscoast_…pdf (2.7 MB).

This map was used as a Discussion/Action Item for County’s “Public Hearing” of their Midcoast Stormwater Drainage Committee on 11/8/07. It is evidence that the County is totaly ignoring the strong advisements NOT to allow building on Steep Forested Hillsides provided by multiple U.S.G.S. Geologists; there wouldn’t be drainage problems if the County would heed their advice!

The County is proposing in their so-called “LCP Update” to build houses on all areas indicated in red and blue including Steep Forested Hillside areas in El Granada & Montara that are really Hazard Areas, Ephemeral Streambanks, Antiquated 25’ Sub-Standard Lots in singles or in groups, Marshy, Wetland areas in Miramar, Princeton & Moss Beach, Unstable Bluff areas in Moss Beach, on Community Open Space Conservation (Historic Burnham Strip) in El Granada & in the three areas County is referring to as “Affordable Housing” Sites. Note that there are already applications at the County to build in nearly all of these areas.

The County’s “LCP Update” indicates that anything that is rolled in & bolted down or built on 25’ Sub-Standard Lots in singles or in groups that the County determines to be “Affordable Housing”  will be able to exceed the 53% FAR/% Lot Coverage which is the 2nd highest of any other City or Unincorporated Area in San Mateo County, receive PRIORITY WATER and, will NOT BE INCLUDED in their Yearly Growth Rate Controls. /Barb Mauz

Barb Mauz,

This topic began as a Letter to the Editor posted by Mr. deBeer, asking questions about his water rates and tax bill line items for the Montara Water and Sanitary District, i.e., the General Obligation Bond tax and his Sewer Service Charge.

All of the responses - until yours - have stuck to that subject matter.

San Mateo County’s current Midcoast Local Coastal Program Update, their policies on development on substandard lots, their affordable housing policies, their decisions to allow development on high risk slopes and in urban / wildland interface zones, their continued approval of new development on private wells even in the face of known well failures, etc., etc., are all interesting topics in their own right.

Some of us are eager to build wherever we can, and as big a project as we can get away with; others of us consider many of the County’s policies unwise or even harmful, leading to problems such as failed wells or buildings slipping down hillsides or into the ocean. Some think that the County fails to enforce laws and policies that are designed to protect the community or the environment, when those policies might slow down development; others think that it is too difficult to build anything, anywhere.

These would all be great discussions.

However, may I respectfully suggest that you begin a new topic - either by submitting an article for review by the editor, or a letter or Town Hall topic - for any of these other subjects that interest you? There is plenty of discussion opportunity on every one of them. It should not be lost under a heading that looks like it only addresses water rates.

Just a suggestion, of course. And (before any of those folks from TalkAbout chime in) I am not in any way attempting to restrict your freedom of speech, just trying to guide you to optimum use of Coastsider’s discussion facilities.

Paul Perkovic (commenting as a Coastsider reader)

Comment 19
Mon, November 12, 2007 9:31am
Barry Parr
All my comments

Paul’s right. It’s important to keep to the topic. It’s better for the conversation, and it makes it easier for folks to find threads in the future if they’re not all attached to a single story.