Why is the Santa Clara Valley Water District raising water rates
when it recently had nearly $500 million in reserves? That
’s half a billion in the bank, but our water rates are
increasing – something doesn’t add up. That inequity might be why
Santa Clara County officials recently audited the water district’s
finances, and the results are eye opening.
Why is the Santa Clara Valley Water District raising water rates when it recently had nearly $500 million in reserves?
That’s half a billion in the bank, but our water rates are increasing – something doesn’t add up.
That inequity might be why Santa Clara County officials recently audited the water district’s finances, and the results are eye opening.
The water district’s reserves will drop to $302 million by the end of this fiscal year, but that still doesn’t square with the anticipated 72 percent increase South County water users face in the next decade. North County customers face a 48 percent increase in the same time period, the county’s audit manager, Roger Mialocq, told reporter Matt King recently.
Other audit criticisms of the water district’s finances included:
• A poorly defined capital project budget that sports a 15-year, $1.68 billion budget.
• Poor capital project cost estimates. “The cost estimates for individual projects are not refined to reasonable accuracy before the projects are included in financing models and annual appropriations,” the audit reads.
• Practice of diverting unused funds from under-budget projects to capital reserves, limiting their use.
• Ineffective use of flexible reserve funds. Instead of multiple recent increases, water rates could actually be lowered if reserve funds were properly used, the audit said.
• Fat employee salaries and benefit packages. According to King’s article, “Auditors also found that the district’s 813 employees are paid an average of $128,025 in wages and benefits, or 26 percent more than the average county employee. The district’s 144 exempt employees earn an average of $176,960.
• Poor investments. Auditors say the water district invests too much money in discretionary items such as a water rate stabilization fund and various insurance funds, and makes little effort to realize maximum interest income.
How have water district officials reacted to this scathing report? Not by promising sweeping changes. Instead, they’ve made minor changes, but oppose much of what the audit recommends.
“Changing the whole structure of the way we do capital projects would make us a different type of organization doing a different type of work,” Santa Clara Valley Water District CEO Stan Williams told King.
Clearly, the water district needs to be a different type of organization: an organization that respects ratepayers instead of viewing them as unlimited sources of revenue; one that puts flood control and delivering clean water at the cheapest rate possible at the top of its priority list.
We’re grateful that county supervisors, who have budgetary approval powers for the water district, ordered this audit. But that’s not enough. The audit will be presented to the supervisors tonight.
Supervisors need to order sweeping changes in the way the water district does business. Supervisors and water district board members need to hear from county residents that this is important, that they’ll remember any action or inaction at the next election.
Don Gage
District 1 Santa Clara County Supervisor
(408) 225-5010,
70 W. Hedding Street, San Jose, CA 95110,
do******@bo*.us
Rose Kamei & Sig Sanchez
Santa Clara Valley Water District Board of Directors
408-265-2607 ext. 2270,
5750 Almaden Expressway, San Jose, CA 95118
cl*************@va*********.org
