As we evaluate the future direction of our water district I appreciate the opportunity to provide my personal viewpoint on the "rebate" program in the context of evaluating and implementing services to the community using our modest share of our property tax revenue.
At the March 30th, 2006 meeting, the Board had an extensive policy discussion surrounding the water cost offset program (e.g., rebate). Based on input from our legal counsel, the water cost offset program appears legal; however, the program as currently structured lacks any political support from our County representatives (the LAFCo commission including our County Supervisor, Rich Gordon, and the LAFCo executive director). I believe lack of political support, or at least some degree of neutrality, jeopardizes the future of our District. If we do not change our current course, the County can "make an example of us", make it difficult for us to activate new services, and possibly lobby to eliminate our property tax revenue stream.
The good news is that I believe we can restructure the cost offset (e.g., rebate) to make it politically defensible and achieve the goal of retaining some control over our water costs:
1) Modify or eliminate variable component to ensure benefits are distributed more equally. Currently, the cost offset program disproportionately rewards the District's largest water consumers, see the chart below. Using annualized consumption data from 2000, the smallest consumer of water would receive only $156 annually while the largest consumer would receive $1154, over a 7 fold increase. This disparity is due to the variable component. September 2005 data show that 40% of the variable rebate amount goes to 10% of District residents.
2) Directly link the rebate to a public purpose - i.e., water conservation. At the LAFCo hearing, the commissioners raised concerns that our rebate was not consistent with our stated goal of "water conservation". We could make this a direct link by requiring that participants in the rebate program undertake conservation measures such as installing water efficient appliances.
3) Ensure the rebate is a moderate portion of the District's budget. Currently the rebate is budgeted to cost about $59K (9 months of rebates) in 2006, and over $100K for a full year. With a total budget of $136K and fixed costs of over $40K, this leaves little funding for any other services that might be desired by the community. I believe budgeting the rebate at between $30 and $50K is defensible and will help to address the concerns raised by LAFCo.
This overall approach to the rebate is also something I can champion personally as it is consistent with my view that spending the bulk of our precious tax revenue on a program that disproportionately distributes revenue is inappropriate and politically indefensible. The most prudent course of action is to link cost offsets to participation in water conservation programs, and determine community desires for spending tax revenues on services that benefit our broader community.
The Board will revisit this issue at their special meeting on April 20th. I encourage your participation.
Submitted by -
David Smernoff
