Water rates and pump tax have been raised rapidly and unjustifiably, tax money is being wasted on wrong projects, bureaucracy has grown beyond any justification, Groundwater is being polluted with hazardous wastes, environmental issues have not been addressed properly, Needed flood control projects have been neglected, and the Board has been losing control over the management.
ISSUES AND DISCUSSIONS
- Water bills have gone up at an unjustifiably fast rate.
1.Over 50% of an average water bill from Great Oaks Water Company in South San Jose consists of pump tax. In the last 8 years, pump tax charged to many water retailers, farmers, and individuals by Santa Clara Valley Water District (SCVWD) has increased by over 100%. We believe a large portion of the pump tax goes to support the bulging District's bureaucracy.
2.Rates charged for the supply of municipal and industrial water in Los Angeles County is lower than the water rate in Santa Clara County. This fact is especially amazing considering the fact that the Los Angeles Water and Power Agency imports water from Northern California through the California Aqueduct and over long distances from other sources of water.
3.The District continues to import expensive water from the Delta when local reservoirs and groundwater basins are full. In fact, 56,000 acre-feet of rainwater stored in local reservoirs were released, unused, to San Francisco Bay last year.
4.God provided free air and water and people dug their own wells, but they have to pay tax to withdraw water from their own private wells. The pump tax is especially unfair in the South County, where artificial groundwater recharge is negligible and natural recharge is adequate to replenish the groundwater. Consequently, the Water District does not incur any cost for groundwater recharge, but residents of South County still have to pay the pump tax.
5.In my 41 years of experience with groundwater management and operations, I have never seen such an unreasonable imposition of pump tax in any jurisdiction. If Santa Clara Valley Water District was a student of mine, as a professor, I would give the Water District a failing grade for such a gross mismanagement.
6.Wholesale rates for treated surface water charged to water retailers like San Jose Water Company has also risen over 60% in the last 8 years.
7.The Bureau of Reclamation water rate from the Central Valley Project (CVP) is less than one-fourth of the District's treated surface water and pump tax rate in the North County (Santa Clara County north of Metcalf Road in South San Jose), and one-half of the pump tax in the South County.
8.Without considering the existing steep price of water, the Water District continues pushing up the water rates at an accelerated pace.
It is evident that the Water District (SCVWD) is causing a high rate of inflation in the consumers' water bills.
- Hundreds of millions of dollars have been wasted on unjustifiable engineering projects or in implementation of incorrect solutions to water problems.
Some examples of waste of taxpayers' money are:
1.The Semi-Tropic Project in which SCVWD has committed to contribute $100 million dollars in a San Joaquin Valley aquifer for supplying water to Los Angeles County,
2.Low Point Project in which algae-infested water is pumped from San Luis Reservoir, and brought to our reservoirs and recharge ponds. It will lead to algae blooms and serious infestation. Now to correct this problem, the District is planning to import water directly from San Felipe Reservoir and bypass San Luis Reservoir. It will cost one billion dollars with limited benefits. It is completely irresponsible to put such a heavy burden on the taxpayers.
3.The District subsidizes recycled water, which is the most energy intensive water to produce and deliver. Instead, last year the District simply allowed 18 billion gallons of rainwater from local reservoirs to be discharged, unused, to San Francisco Bay. Any energy consuming process adds to the global warming and endangers the well-being of our future generation.
4.The District opted for a costly and disastrous solution to annual disposition of 8,000 acre-feet of treated wastewater from the San Jose-Santa Clara Sewage Plant. An inexpensive alternative of piping the excess water into the Bay near Dumbarton Bridge at a cost of only $40 million was abandoned in favor of a $450 million project of pumping water upstream along Coyote Creek for watering parks and highways. This action is polluting the groundwater due to high dissolved solids and toxic chemicals in the treated wastewater. The unhealthy and dangerous chemicals left in this primary treated waste water include Trihalomethanes(THM), Haloacetic Acids (HAA), N-Nitrosodimethylamine (NDMA), and Hormones. It has also raised already high groundwater levels and caused local flooding.
5.Unnecessary and excess real estate properties have been acquired through condemnation process and leasing. Buildings have been constructed and expansion of facilities has been made, leading to under-utilized or surplus spaces. Taxpayers have to pay huge sums of money to support such unneeded infrastructure.
6.Small spending on unnecessary projects does add up to huge waste of money. One such example that comes to mind is to install fiber optics wire to establish communication between San Luis Reservoir and the point where the tunnel starts in the hill east of Gilroy at a cost of $1,250,000. First of all, the justification for such a telephonic connection is at best dubious; however, the same communication can be easily established by radio by a mere expenditure of couple of hundred dollars. The Water District deleted this item last year after the futility of this project was pointed out, but this year it has again been included in the budget and has been authorized.
7.The Water District is building a fully-equipped laboratory with expensive modern instrumentation to perform engineering testing in-house. Until now testing has been contracted out to private testing labs. Maintaining such an expensive laboratory facility is very costly, requiring maintenance, operation, and specialized manpower. Frequent upgrade of modern equipment will require huge investment periodically. The Water District will sustain huge losses due to idle time and under-utilization of the facility, because this agency is not in the business of receiving testing services regularly. Building of this lab is also against the principle of free enterprise system, which has made America the largest economic power in the world. Depriving private and efficiently managed labs of the contract opportunities shall be opposed by all. The Water Board should not have approved such an anti-American proposal by the District's management.
- Rapid and unnecessary growth of bureaucracy has more than doubled the manpower costs during a short period of 2001 to 2005.
1.This trend is continuing. However, the Water District's job and duties have not changed. In last 20 years, the county population has increased by 25%, but the total water demand in the county has declined. Responsibility of the District has not changed. Why, then, is there any need for such a rapid bureaucratic growth at the Water District? Exploding size of the District's budget is unexplainable and outrageous.
2.Current management of the Water District is on a path to build excessive manpower and do most of the engineering and studies in-house. This is very unproductive, because specialized engineers and scientists will be idle most of the time, depending on the workload. Government agencies are well known for their inefficiency and bureaucratic bottleneck. Private firms are efficient and competitive. This trend at the Water District is also against the very principle of American economic system, it discourages competition and destroys private companies engaged in providing engineering and other services. The question is what the directors at the district are doing. Some of them have simply become rubber stamps to the District's management. The time for change is now.
3.As pointed out in the Grand Jury Report of 2005-06, salary levels of employees at the Water District is much higher than those of similar employees in any agency and private industry in this area. An employee with only ten years of service is entitled for retirement and life-long health benefits. Private firms are hard pressed to hire engineers and scientists at an affordable salary. Many private firms have complained to me about this situation.
4.Support staff is about thirty percent of the working staff, which is very high, wasteful, and completely unjustifiable. I call it a complete disregard of the public interest. As noted in the Grand Jury Report of Year 2005-2006, public should start to take more interest in the affairs of the Water District. Turn over in the Water Board's directors is rare. Now the time for change has come. Please vote for Ram Singh. Ram Singh will fight for you.
- Management decisions and programs continue to be wasteful and have produced undesirable consequences.
1.The District fails to actively manage the Santa Clara Groundwater Basin to maximize use of local groundwater. Due to wrong water supply policies of the Water District, the area consisting of North San Jose and Santa Clara is experiencing a high water table, flooding, and dampness in homes and businesses. Consequences are molds and health hazards to the residents, increased infestation of termites, and sickness of residents. Danger of lawsuits by suffering residents is always present.
2.The District encourages water retailers to purchase its treated water, rather than use available local groundwater, because it has overbuilt the water treatment facilities and has much larger capacity than needed. As a result of it, the District has been discouraging the use of groundwater and pushing its treated water to retailers. This has resulted in magnification of adverse consequences of high water table. Capital investment in three water treatment plants is huge. Now the District has to incur huge on-going costs of maintenance and operation.
3.California Department of Transportation maintains a large pumping station near Taylor Street and Highway 101 to keep this intersection free of water due to high water table in this area.
4.There have been four grand jury investigations of the District's management practices and extravagant ways. These grand jury investigations have lead to distrust of the District's operation.
5.The management lacks the proper attitude to serve the taxpayers and citizens. No tax money should be spent without careful examination of each budget item. Projects like building a lavish office building and constructing of a ten thousand square feet care facility for twenty kids without estimating the capacity requirement are outrageous and must be stopped.
6.The District can save a lot of money in operations and maintenance by streamlining the tasks and emphasizing the productivity from the employees. Idle manpower and equipment are a great burden to the taxpayers.
- Citizens of Santa Clara County are not adequately protected from floods.
1.Old levees on creeks were constructed by piling earth without applying the principles of geotechnical engineering. They were not properly compacted and consolidated. Some of these levees are very weak and will be breached by high flows. Our creeks are full of barriers, which will obstruct flow and raise water levels during high discharge periods.
2.A parcel tax was passed many years ago to clean the creeks, but little cleaning has been done. I have taught courses in stream channel hydraulics, and my expertise on this subject compels me to say, `urgent flood protection work on many sections of streams in this county has been ignored'.
- Riparian corridors are polluted, and watersheds are undergoing immitigable environmental and ecological damage.
1.Creek banks and surroundings are full of garbage dumps, food wastes, bottles, and filth. Riparian habitats may suffer unrecoverable ecological damage.
2.Watersheds should be managed to provide runoff without any quality degradation.
- Public safety near the reservoirs, dams, and creeks must be the District's concern.
1.Creeks, going through old gravel quarries, are deep at places, and lack warning signs and fences. Two adults died of drowning near Metcalf Road in Coyote Creek in August 2004.
- Pollution of the groundwater must be prevented.
1.It's not enough to remediate after the contamination has occurred. Industrial hazardous wastes have contaminated the groundwater frequently at many places in the county. 2.Recharge of primary treated wastewater by the District has become another source of the groundwater quality degradation.
- The Board of Directors of Santa Clara Valley Water District must exercise its independent oversight role effectively.
1.The Board represents the citizens of Santa Clara County. The management makes recommendations about the budget and for any plan of action, but the Board makes the final decision. The Board needs to analyze, understand, and make right decision in the public interest.
2.Current Board needs an expert of water resources engineering with knowledge and experience to assist it in the decision-making process. The oversight role of the Board is lost, if it depends on only the staff and management presentation.
- The District's practice of mixing funds, allocating revenue to a different account than it was originally intended, and taxing for wrong purposes have resulted in many protests and lawsuits.
1.Grand Jury Report of 2005-06 condemns this practice. For example, the District charges Pump Tax for recharge of groundwater, then uses the Pump Tax for non-groundwater programs and expenses.
2.Presently, there are on-going lawsuits against the District for such misappropriation of funds.
- Another important issue needs to be put to the public's judgment is the dedication and performance of a person in carrying out the expected duties as a Water Board director. The people of Santa Clara County deserve to have a serious and dedicated representative.
- There have been four grand jury investigations of the District's management.
1.Excerpts from the 2005-06 report are attached as an Attachment below at the end of this paper.
2.The grand jury report is highly critical of the District's operations.
ISSUES SUMMARIZED
Exploding budget
- Water bills have gone up at an unjustifiably fast rate and have doubled in last eight years.
- Hundreds of millions of dollars have been wasted on untenable engineering projects or in implementation of incorrect solutions to water problems.
- Rapid and unnecessary growth of bureaucracy has doubled the manpower costs during a short period of 2001 to 2005.
- Management decisions and programs continue to be wasteful and have produced undesirable consequences.
- The District's practice of mixing funds, allocating revenue to a different account than it was originally intended, and taxing for wrong purposes have resulted in many protests and lawsuits.
- The District's high level of reserves and the highest salary levels compared to other agencies have been criticized in Grand Jury Report. The District also has a very high level of support staff.
- Unneeded properties have been acquired at the taxpayers' expense?
Inadequate Flood Protection
- Citizens of Santa Clara County are not adequately protected from floods.
- Levees on creeks are weak.
- Creeks are full of obstructions.
Continuing Pollution & Environmental Damage
- Riparian corridors are polluted, and watersheds are undergoing immitigable environmental and ecological damage.
- Pollution of the groundwater must be prevented.
Lacking Safety near Creeks and Ponds
- Public safety near the reservoirs, dams, and creeks must be the District's concern.
- Serious injuries and deaths by drowning have occurred.
Administration must improve
- The Board of Directors of Santa Clara Valley Water District must exercise its independent oversight role effectively.
- Another important issue must be put to the public's judgment is the dedication and performance of any individual in carrying out the expected duties as a Water Board director.
- There have been four critical grand jury investigations of the District's management.
STEPS TO ADDRESS THE ISSUES
Economic Reforms
- Trend toward increasing water rates and pump tax must be reversed. Pump tax should be drastically cut to encourage greater use of groundwater by water retailers to lower unhealthy high water table levels.
- The District may explore the possibility of putting on hold one of the water treatment plants, save operational cost, and encourage greater use of groundwater.
- The Water District must stop the improper and unlawful taxation of groundwater and misuse of funds.
- The District must abide by laws and rules to avoid unnecessary lawsuits and the resultant cost to the taxpayers.
- Unreasonably excessive overhead cost must be reduced.
- By the use of competitive bidding, the Water District should contract out services that are inefficiently performed in-house.
- Unneeded projects and wasteful projects should be eliminated. Any needed project in the future should follow proper planning, design, evaluation of all possible alternatives based on engineering economics and system analysis, consideration of sound environmental assessment, and public input.
- The District should withdraw from the Semi-Tropic Project for storage of water in a San Joaquin Valley aquifer.
- The District should not support the current method of disposing treated wastewater.
- The District should renegotiate the San Felipe water purchase agreement to avoid contaminating our water with algae from San Luis Reservoir. It may be difficult but it should be explored. Plan to transport water directly from San Felipe is very costly and should be abandoned.
- All surplus and underused properties shall be leased or sold.
- Concerted effort shall be made to enhance productivity and efficiency of the staff. Hiring freeze should be put in effect except in special cases with Board's approval.
- Grand Jury reports should be taken seriously and its recommendations shall be implemented.
Flood Control Measures
- Levees must be strengthened and creeks cleaned to provide an effective flood protection to our citizens. Federal and State grants shall aggressively be sought to implement flood control projects.
Minimization of Pollution to Environment & Groundwater
- Strategies must be developed and implemented to safeguard the riparian corridors, creeks, watersheds from environmental damage, and natural habitats from destruction.
- Regulations should be developed and proper monitoring of groundwater should be employed to prevent any future likelihood of its contamination by hazardous and toxic wastes.
- Recharge of unsafe treated water should be stopped.
- The District should actively participate in the planning of any new development in order to minimize the resulting environmental damages.
Insure Public Safety
- Appropriate measures should be taken for the public safety near the creeks, reservoirs, and dams. Signs and fences should be installed where needed.
- Safe areas for fishing and water sports shall be set aside, and regulations shall be imposed to operate these areas.
Enhance Board's Oversight Role
- The Board shall re-establish its effective oversight role with the help of a knowledgeable director. Taxpayers' interests shall be safeguarded to the maximum extent.
- Meetings, records, and budget must be available to public and interested parties without any restriction.
- Election of knowledgeable and dedicated directors is essential for improving the functioning of the Water District.
- Grand Jury recommendation on the tenure of directors shall be considered, and formula shall be devised to comply with it.
BENEFITS OF THESE STEPS
- Taxpayers will save money on their water bills and will get relief on parcel taxes resulting from elimination of waste and increased efficiency.
- Proper management will assure long-term supply of clean water at reasonable prices.
- Communities and homes will be protected from devastation of floods to the maximum degrees.
- Lowering the water table will eliminate dampness and mold conditions from the affected homes.
- Groundwater will be protected from contamination with greater assurance.
- Our riparian corridors and watersheds will be protected from environmental deterioration.
- Safety around the waterways will be strengthened.
- Public concerns and difficulties will be given top priorities.
- Public will have easy access to information due to open policies and increased accessibility to elected officials.
- Public trust in the Board and management of the Water District will be enhanced.
VALUES DERIVED
- Citizens and families will have more money to enjoy their lives.
- People will be safe in their homes from floods.
- Clean water and better environment will be assured for future generations to come.
- Public health and safety will improve.
- Public will feel secure with the enhanced trust of elected officials.
- Dedication to service and ethical values will be enforced for all.
- Citizens will enjoy greater independence.
ATTACHMENT
Excerpts from grand jury report:
2005-2006 SANTA CLARA COUNTY
CIVIL GRAND JURY REPORT
Voters fail to participate actively in SCVWD director elections. Many directors run unopposed and many serve multiple consecutive terms. The elected directors may not represent a broad cross-section of the population. Independent voter advocacy organizations and news media should encourage, educate, and energize the public about the importance of participating in the electoral process. This may also provide a forum for explaining and vetting SCVWD programs for a broader set of stakeholders.
The five current elected directors have served 19, 12, 11, 9, and 5 years. Two of the seven directors are appointed by the BOS and have served 25 and 9 years. The average tenure of all seven current Board members is about 13 years. Since the SCVWD Board has powers for taxation, eminent domain, rate setting, and debt issuance, no Board members should be appointed. The two currently appointed Board positions should be converted to be filled by elected BOS members. Participation of BOS members would serve to strengthen the link between the SCVWD and the BOS to perform the budget oversight function as well. There are strongly held diverse opinions concerning the proper role of the District and its spending. Projects and expenditures are not always supported by the public or by retail distributors. The District needs to better communicate and vet its activities with the various stakeholders and the public. Program goals should be selected through procedures that are more responsive to these views. One major criticism is the size of the administrative staff, estimated to be 214 persons (FY 2006). This represents 26% of the total authorized headcount.
The District's Human Resources Department acknowledged that the minimum and maximum salary ranges for similar positions which exist in the County tend to be higher in the District as they attempt to attract highly qualified candidates. The District's budgets for salaries and benefits doubled from $49 million in FY 2000 to $99 million in FY 2006. This is due to increases both in staff size and in associated salaries and benefits.
SCVWD employees have generous retirement benefits. After 10 years employment, they are eligible for full lifetime health insurance. After 15 years, health insurance coverage includes the employee and one dependent.
Water rates have increased significantly over time because of higher costs and Board decisions. Poorly understood rate differentials between North and South County have to be better justified and explained. The District should carefully prioritize its capital projects and other costs to fully justify rate increases. Specific water-rate concerns voiced to the Grand Jury...
- Over time, larger retailer bills to customers are driven by increasing pass though costs from the District
- The SCVWD sets excessively high rates to fund the District's ostentatious life style
- "Pump taxes" to pay for recharging aquifers with imported water, are excessive, since rainfall accomplishes much of this naturally.
Outside auditors question some District financial practices, including management of CalPERS benefits accounts, year-end cash balance, and cash flow. The District should consult outside financial advisors to be sure it is using best practice. There have been substantial criticisms that reserves are excessive and inadequately justified. Even though the District has reduced its reserves significantly in recent years, it should clearly document its reserve management policy and justify its reserve levels. It should also reconsider and justify the balance between pay-as-you-go and debt funding of capital projects. The District needs to refine and coordinate its performance measurement efforts to refocus on those programs that can offer the most useful and tangible results.
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