HELIX WATER DISTRICT RESIDENTS EXPRESS IRE OVER PROPOSED RATE INEQUITIES, ALLEGE DECEPTIVE NOTICES AT GROSSMONT-MT. HELIX ASSOCIATION (GMIA) PUBLIC FORUM

GMIA spokesman Mark Schuppert, with Helix Water Board Directors Kathleen Coates Hedberg and De Ana R. Verbeke

by Gayle Early

May 20, 2009 (Mt. Helix)—Residents poured into Fuerte Elementary School’s auditorium Thursday evening, May 15th to get a status update on Helix Water District’s (HWD) rate-increase proposals and express outrage over what they contend is an unfair tier-pricing system. GMIA, representing the large unincorporated area of East County around La Mesa, offered eight recommendations to residents as well as to the water district for ways it can make the system fairer.

Faced with water cutbacks and increasing rates across California, local residents expressed desire to do their part but not shoulder an unfair amount of the burden.

GMIA’s Mark Schuppert moderated the forum. He said HWD’s proposed tier structure, although recently modified, is unfairly biased against owners of large parcels and larger families.

He said that people with large lots will still pay more, because they’re going to use more water. “It’s very obvious a large lot will pay more, and we deserve to pay more. But we don’t deserve to pay more per unit.”

If the water board votes for the price increase next Wednesday, on May 27, it would take 31,000 (50% of HWD’s existing customers) protest letters to legally overturn the ruling.

“We really need to send a message to let them know we’re not going to just take it. We care about this.”

Schuppert emphasized the importance of writing letters and also attending the May 27 meeting, the last opportunity for public input on this first rate increase, not to mention a controversial rate structure that will determine future increases. “Keep in mind it doesn’t end on the 27th.”

Two HWD board members attended the forum, Kathleen Hedberg and De Ana Verbeke. The two said they have been fighting for local residents’ concerns and rights but have been consistently outvoted by the other three members of the Board. (See map of Helix Water District divisions.)

Richard Smith, John Linden, and Charles Muse provided the majority to pass the rate-increase proposals, as initially outlined in the district’s Water Rate Study (pdf 694 kb) in February. After public outcry and efforts by the two representatives, the board revised the rate structure in its May 6 meeting, delineating the changes on its website, “Reductions to Water Rate Proposal.” Schuppert summarized the new Proposed Pricing (see table below, which GMIA produced based on HWD’s Prop 218 notice) and discussed what he says is an improved but still punitive pricing structure.

Flawed Rate Structure?

The Metropolitan Water District of Southern California is imposing two rate increases, the first 19.7% on September 2009, the second 21.5% by January 2011, for a total compounded 45% increase. San Diego County Water Authority (CWA) buys this water at a wholesale, flat rate and distributes it to its two dozen water districts, Helix being one. CWA will pass through all of the 45% increase to its districts “and then some,” said Schuppert. “Our focus is how that 45% increase will be passed along to us.”

To encourage conservation and also pay for infrastructure and other costs, Helix sells the water to domestic customers on a tiered system, and not the flat rate at which they purchase it from the County. For each incremental increase of domestic water use, HWD charges a higher rate. In other words, the more water you use, the higher cost per unit you pay.

“And that’s one of the fundamental flaws of the system,” Schuppert explained. It assumes that a person living in a small house with a small family on a small lot has the same basic water needs as, say, a large house/family living on a large lot. Similarly, a lot with half an acre has different water needs from a 2-acre parcel.

“When you start comparing what’s being charged for what’s needed, our community’s being discriminated against, simply because they’re charging us a higher average rate per unit of water. Even though [HWD doesn’t] pay it on the higher rate. (June Skillman of the Metropolitan Water District, said on the phone that MWD does charge member districts a flat rate, but that rate increases to a second-tiered level if any district exceeds its allocation. “In the last couple years San Diego County Water Authority has not gotten into Tier 2,” she said.)

HWD’s original proposal called for up to 90% rate increase for residents using 60+ units, labeling these customers “excessive.” After massive outcry, the Board opted to slash the highest rate, Tier 5, and also agreed to remove pejorative terminology associated with each level of water use, which were: “SuperSaver, Efficient, Mid-Tier, Inefficient, and Excessive.” Now, usage levels are simply called ‘Tiers.’”

The directors also lowered the rate for the highest usage level, Tier 4 (consuming 43+ units at $4.52 per unit). “They did acknowledge that the system was extremely unfair, and they changed it. Now it’s just ‘really unfair,’” Schuppert quipped.
The GMIA provided a table comparing the current pricing with proposed pricing (pdf 16 kb) for residents using 50 to 200 units of water, illustrating what will be, for those on large lots, a 30% to 39% increase in their rates, as opposed to the HWD-advertised rate of 22%.

Water District’s “Average” Skewed to Small Families and Small Lots

HWD’s first assumption is that the average person uses 137 gallons a day, which amounts to about 11 units per person for each billing cycle. Average water consumption, throughout Helix’s entire 55,500-domestic meter district, is 33 units per family.

This “average” does not take into account parcel or family size; it implies that water consumption for three people living in an apartment is weighted the same as that needed for a family of four (add one or two more if you are a caregiver) living on a multiacre lot with, say, mature landscaping, gardens, fruit and nut trees, and horses or other farm animals.
Everyone in the Helix water district is expected to fall in with the same 33-unit baseline “average residence,” the proposition implied, or pay accordingly.

East County is known for its larger parcel sizes, especially the unincorporated areas. Schuppert contended that a half-acre-plus property can consume up to 200 units of water per cycle. Even with drastic cuts in consumption and intense efforts at conservation, a one-acre parcel cannot reasonably operate on the same amount of water consumed by the district’s “average user.”

One resident called HWD to come assess her house, yard, and landscaping. The specialist arrived with five years’ records of her family’s water usage and inspected every aspect of water use on site. “He found absolutely nothing we can change. We’re already doing everything we can to conserve.”

Another mentioned the several fruit trees on her property. “Bringing trees into the community cools the earth, attracts clouds, which brings more rain. All the water I use on my property goes back to groundwater, which can be reused, and it’s cleaned by our natural earth. No toilet-to-tap issues there. When I’m using water, I’m not feeling like I’m doing something bad. I feeling like I’m doing the very best I can for our community. I grow food, and yet, I’m considered an “inefficient user.” I don’t understand why that is?”

Larger Families Pay More Per Unit

Schuppert compared prospective water bills (pdf 12 kb) for a two-person household (22 units at $94.75) with a five-person household (55 units at $221.51) under the flawed pricing paradigm. The larger family will be billed a higher rate, for the same water, after 43 units consumed. “Not because they’re wasters. It’s because they have different needs.” In the earlier, more draconian proposal, the five-member family would have been labeled “Inefficient,” even though per-person usage would have been the same.

“The system doesn’t address this issue,” he said. “The proposed tier price system is fundamentally flawed. And just because there’s no easy remedy, it doesn’t justify not doing anything.”

One audience member pointed out that, as far as the current plan goes, there’s no incentive for conservation for the lower water users, or the person in a smaller house. “Maybe 3/4s of your customers are not going to have any incentive, and that’s a total failure of this plan when it comes to conserving water.”

“Everyone should be conserving,” agreed Verbeke.

The End of Mt. Helix as We Know It?

“The proposed tier pricing will not only affect our individual finances, but our community character. We should all do our part, but Helix Water thinks that our part includes significant removal or destruction of our mature and long-established landscaping simply because we have more lot area with landscape,” stated GMIA spokesman Schuppert.

“We have more landscaping because we have larger lots. It wouldn’t be right for us to kill everything but on 4000 square feet [that’s about a tenth of an acre], simply because that’s what they set the standard to.

“It’s going to hurt our community in more than one way,” he added. “Not only will it detract from the aesthetics, it’s going to set up a communitywide fire hazard. We know we’re going to have firestorms again. We were very lucky the last few times, because Helix would be very difficult to defend, but it just seems that charging us more to encourage us to kill our landscaping, or kill a good portion of it, is unfair to our entire community. Of course we will have a huge erosion problem when the firestorm comes through and they take all that water out of the lake and dump it back on our properties.”

“Also, if it costs more to maintain your home, you might want to draw the conclusion that it’s affecting your value. Most prudent buyers will consider that.”

Schuppert contended that the Board could calculate a better algorithm for fair water use, taking into consideration lot and family size. “There’s a problem and before you implement this tiered system, it should be addressed. Otherwise it’s very obviously unfair.”

If the flaws in the pricing structure can’t be addressed, he said, HWD could consider charging a flat rate, like the one it pays the County. “Then at least we will all be encouraged to conserve equally and we’re not singled out as being ‘wasters’ simply because of where we live.”

Other water districts have proposed taking into account different lot sizes. For example, Padre Dam’s proposed rate structure is in 1/8th acre increments up to half an acre, then half to one, then one to two acres. It has a different allocation for varied lot sizes and changes base rate allocations per season.

In addition, Verbeke mentioned that other districts use an assumption of a four-person household and allow for petitions to increase that number. “It’s not impossible,” she said. “It will be addressed.”

Commercial and Governmental Entities Allowed to Guzzle?

Commercial and governmental entities will receive a uniform rate ($2.93 per unit) provided they stay within their water budget, giving little incentive to, say, CAL-TRANS to turn off sprinklers on freeway meridians on rainy days or for business parks to cut back on lush landscaping while residents let their own lawns die. Exceeding its water budget by 20% bumps the commercial class to $4.25, still less than the amount paid by residents exceeding a mere 43 units of water at $4.52 per unit.

“Not only are we carrying a heavier burden for the overall domestic class of water usage, we’re also carrying the burden for the other classes that are paying much less to water Fletcher Parkway,” said Schuppert. “That’s kind of irritating when we’re paying as much as $4+ per unit, and we’re seeing those units run down the hill at a lower cost.”

A member of the audience pointed out, “Many times I see, on rainy days, businesses and schools with their sprinklers on. Why are they not on a tiered system and not encouraged to conserve?”

Hedberg agreed. “I’m asking my General Manager [Mark Weston] the same question. Why is the pricing not equitable? This is the way they proposed it, and I do have a problem with that proposal.”

Verbeke added, “We both opposed the 218. We did not want them to put it in as it stood, and we wanted it delayed. Since then, we have made these modifications, and we are working to make changes. In our ad hoc committee, when we lowered the Tier 4 rate, I wanted to increase the irrigation rates. But we cannot increase any rates without going through the public notification process. The only other option is to stop the whole process and start over, which we are trying to do.”

Verbeke mentioned that Cal-Trans rationalizes its landscaping water use (even on rainy days) for fire prevention and erosion control, and many in the audience responded that that is no different from what homeowners seek to do.

More Rate Hikes Without Public Input?

The GMIA lodged another concern with HWD’s advertised Drought Level pricing. Currently, Helix Water District is in a Level 1 drought (which, among other things calls for a 10% reduction in water use). Other local water districts have declared a Level 2 drought (calling for 20% reduction in water use), starting with the San Diego County Water Authority on April 23.

Helix has extenuating reasons, Schuppert explained, that “they don’t have to be in drought Level 2 if they don’t want to be.” GMIA’s concern is that once HWD gets the proposed pricing system in place, “maybe they want to be in drought Level 2.” He and others wondered if it was easier for HWD to get a public buy-in for the whole rate scheme at the lower level 1 rates.

During the May 6 meeting, the Board decided to “defer” pricing for drought levels 2, 3, and 4, rather than eliminate them outright. Schuppert noted the term ‘deferred’ is still used in HWD meeting minutes and in its bill cost estimator online. “I think ‘deferred’ means ‘postponed,’” said Schuppert. “Perhaps it’s postponed until after we get the first tier system in place and then we can bring it back? The General Manager [Mark Weston] says ‘No.’ Which leads to the question: why is the terminology still in use?”

The proposed rate for drought level 2, Tier 4 users (43+ units), was $7.65 a unit, in the original proposal.

Verbeke assured the audience, “We cannot go to Level 2 rates without another 218 public notice.” Many expressed concern, however, about HWD’s resolution “authorizing staff to pass through future, unanticipated increases to rates and charges imposed by [MWD] and [CWA] for wholesale water sold to [Helix] over the next five years.”

Hedberg said that is a line that appears in many districts’ correspondence, allowing for drastic cases of water shortages, and is used more as a qualifier for extreme conditions. Still, folks worry about granting HWD too much authority to raise rates under any circumstances without due public process.

Prop 218 Public Hearing Notice Misleading?

HWD has received criticism for issuing what residents contend is a misleading public announcement, such that owners of large parcels or those with large families were not made fully aware of the true extent of rate increases.

The Proposition stated that the average customer would see a $23.99 increase but, with 12% cuts in their water consumption, would see only a $10.39 increase. HWD sent out its Public Hearing Notice, informing customers of a 22% increase, which many have argued is inaccurate and misleading.

According to Schuppert’s calculations, Mt. Helix residents, with their larger lots, can anticipate a 30% to 39% increase in the first of two planned rate hikes, and an initial rate hike on the order of $75 to $250 a bill.

“I’m OK with paying my share,” said Schuppert, “but I don’t want to pay 75% when somebody else is paying 50%. That’s just not right.”

“And even if you plan on using less, though, you will still be paying more,” Schuppert cautioned. “And we all should use less. We encourage water conservation. As a community that’s something we all need to do.”

If residents on a large lot cut back 12% on 200-unit water usage to 176 units, he pointed out, they are still going to pay close to $800 per billing cycle. “Prop 218 said your bill should only go up $10? Not for us.”

“When people see their bill go up $200, just for this first increase, they’re going to wonder what happened. The point here, is the 218 notice was extremely misleading and the math is bad. It doesn’t reflect our community,” said Schuppert. “I honestly don’t think they did this intentionally, they did the best they could, they just didn’t look at it from our point of view.”

“One of the main problems with the proposed rate is that it is much higher than the erroneous 22% increase,” Schuppert said, “and if passed on May 27, it will set up a price structure that will result in even more severe inequities when next year’s increase is implemented.”

Also not mentioned in the Prop 218 notice, said Schuppert, was an across-the-board base rate increase of about 20% in addition to the water-unit rate increases.

For people on a fixed income, that increase will be felt.

HWD also did not publicly disclose a second planned increase, he said, which would be based on the erroneous tier structure approved for the first rate hike.

Board Axes Irrigation Meters for Large Properties

The Board also drastically curtailed use and availability of the lower cost irrigation meters, affecting the 900 customers who used them. Thirteen residents who run commercial operations will be allowed to keep theirs. Three tiers of the new Level I drought rates for irrigation use range from $2.83 to $5.66 per unit.

Since irrigation water costs less than domestic water, HWD was flooded with calls from owners of big lots requesting irrigation meters. In Schuppert’s opinion, for HWD, “that’s going to defeat the whole punitive pricing. We want to punish you for using that water.”

“Even though the notice said they were going to consider eliminating new meters, they took it further and said if you have an existing meter, now we’re going to charge you domestic rates. That wasn’t in their public notice, either. I don’t know about the legalities of what you advertise and what you do, but there’s a lot of stuff about the way we were given information that just wasn’t quite enough information.”

Helix Getting the Jump on Rates

CWA’s first rate hike to its water districts will be about 15% in September. Helix, however, is instituting its new rate structure as early as June 1 (depending on each customer’s billing cycle), which will be reflected in the August 1 billing cycle, in an effort, it says, to get its customers to begin conserving. The new rates are planned to go into effect, that is, five days after the May 27 public hearing.

Why institute the rate change now, rather than in September? Verbeke, no stranger to the time and expense of making landscaping adjustments, had recommended that domestic rate increases not take place until January, 2010. “It takes time to put all that in. I don’t see that you should be expected to do all that in a two-month period.” One person suggested that instead of hitting customers with the rate increase, just at the time they need to make potentially expensive adjustments, give them that time to institute changes.

Issues With Public Hearing Process

Schuppert said the special meeting on April 27 was rushed through with limited public notification. HWD put the notice out on Friday afternoon and had the meeting Monday. “That assured a pretty small turnout.”

As ECM announced this week, the Board has called a special meeting for Friday, May 22, at 10 a.m. specifically to address legal issues raised with its Prop 218 decision-making process.

Water Shortage and New Construction

Should the County approve new construction plans, given the scarcity of water for existing residents? One question from the audience elicited an ovation: “Seems to me we’re all conserving, conserving, conserving and you’re opening the gates to new customers when you can’t take care of the ones you’ve got.”

Hedberg said that HWD approved a capacity fee for all construction in the district as well as a “No-New-Net-Water Supply impact fee.” The latter funds studies for developing new water sources, such as the El Monte recycled water project. The district had never charged capacity fees and should have forty years ago, Hedberg said, “which is a lot of the reason why the rates are higher to you guys.”

“As far as the fees are concerned, as a resident we’re in a squirrel cage,” another audience member said. “You people generate more fees, but all those fees don’t create one additional gallon of water. So it all affects us. We get hit with the rate increase.”

“In California,” piped a second, “we have water rights, as property owners. The moment we were given a meter and an electrical hook-up to our property, we gain the right to improve it. We have the right to utilize that water in the way we see fit, without your intervention. The way I develop my property over the course of time, is my choice. Now for you to come and say, ‘you need to remove some of your water,’ and to reallocate to somebody else for some new growth, my water rates should trump their water rights.”

Yet another chimed in, raising the specter of the controversial Chicken Ranch proposal nearby. “It’s going to get worse if we can’t grow food on our own properties. It’s going to get worse if a farmer, who pays one-fourth what I pay or less [gets to use so much more water].”

Directors Face Barrage of Questions, Concerns

Verbeke is on the two-person ad hoc committee for deciding fair water rates. She and Hedberg were open for suggestions and questions from the community.

One person suggested that HWD form a public water-rate review board.
Another pointed out that Big Oil does not use a tier system for fuel. “$2.50 a gallon is $2.50 a gallon. If I buy a hundred gallons with my big pickup, I pay $2.50. I think one of the big questions here is this tier system. If I use a lot of water, I’m going to pay the same rate per gallon, not have it quadruple in price.”

Hedberg said the midtier levels are about the cost of the water; they give discounts for people using less (that’s considering indoor use only), charge more for those using more (which is considered the outdoor use). We’ve had a tier structure, and it’s consistent throughout the state as a way to get people to conserve water. I just think our numbers are all wrong.”

The two representatives have made several motions to address these issues, even stop the process, and been consistently voted down by the other three directors. Said Verbeke, “To my knowledge they haven’t had anybody complain” from their districts. “Chuck [Muse] has Lemon Grove. Well, there aren’t any big lots over there. John [Linden] has Fletcher Hills and North El Cajon area. Richard [Smith] has east El Cajon. Not big lots.”

Verbeke stated, “It’s important we do the right thing for our environment. The situation with water today is it’s becoming less and less. Everywhere. Lake Mead is down to critical levels. Our supply is dwindling. And it’s going to continue that way.”

Someone asked why so much storm drain water gets washed out to sea, and lamented the amount of concrete impeding the flow to groundwater.

While not specifically addressing the storm-drain issue, Hedberg noted, “We’re pushing ‘zero waste’ off your property. Everyone should be digging wells around their plants. Rain-barrel harvesting.” She is also in favor of drilling local wells for irrigation purposes.

Off the record, Hedberg told a group, including ECM, “I think the other board members are hearing. One of them asked the question, after the last meeting, ‘So if we have this rate thing go into place, then what if the people are really unhappy. Can we start over? Or can we just change the numbers?’ and the GM said, ‘yes, we can.’”

The Grossmont-Mt. Helix Association has been around since the 1930s, focused on preserving the quality and character of the community. The GMIA Board works with county and regional governmental entities to help resolve issues that impact the community such as transportation systems, traffic control, planning and land use, zoning, code enforcement, as well as crime prevention and law enforcement. The Association also offers a yearly garden tour, community walks, an annual dinner, and is planning a stargazing event.