Developers May Save $38.4 Million in Water Bonus Plan

An Escondido ordinance designed to repay longtime agricultural landowners for their contributions to the city’s water system could result in a potential $38.4-million windfall for developers, slow-growth Councilman Jerry Harmon said Thursday.

Harmon asked fellow council members Wednesday night to rescind the measure, which could result in thousands of free water hookups for developers converting land from agricultural to residential uses. Council members promised that the city will study the situation.

“This was sold as a water conservation measure,” Harmon said. “I see this as growth-inducing because developers can get X number of free (water) hookups by converting agricultural land into residential subdivisions.”

“Perhaps I was guilty for not asking the right questions” when the ordinance came up for final passage last summer, Harmon said. He voted for the measure at that time, convinced that it was designed to conserve water usage, because homes use less water than irrigated fields.

Unexpected Notice

Councilman Ernie Cowan questioned Harmon’s financial figures and criticized Harmon’s method of “just dropping this on us in the middle of a meeting instead of sending us a memo, letting us know what he was doing.”

Harmon said his estimates are based on city figures that show that owners of more than 4,600 acres of agricultural land have applied for the water connection rebates.

Under the ordinance, agricultural water users who have been on the water company’s books as customers since April, 1983, may receive four water hookups per acre at the price of one hookup at the time the land is converted to residential use.

At the current city rate of $2,025 per hookup, residential developers would receive three free hookups per acre--a $6,075 per-acre windfall--if their property qualifies under the ordinance, according to Harmon.

Daley Ranch, a 3,248-acre tract poised for development, would receive a maximum of $19.2 million in free installations if the property at the northeastern edge of Escondido qualifies.

E. W. (Bill) Frey, a former water district board official, explained that the free hookups were meant to apply only to agricultural interests “who have been in the (Escondido Mutual Water Co. system since at least April, 1983) and have paid for the system.”

Frey, who has applied for certification under the 7-month-old ordinance for 500 acres he owns, explained that longtime agricultural landowners “bought the pipes and paid for the reservoirs” that comprise the 100-year-old water company, “and this was designed to keep them from having to pay twice.”

Councilman Doug Best said that he has asked for “an immediate study” of Harmon’s charges, which “will give me the information even before this comes back up before the council.”

Best said that he, along with other council members, “voted for this measure as a way to help agriculture, to keep agricultural prices down” and had “no idea” of the amount of money involved.

Mayor Jim Rady, absent from Wednesday’s council sessions to attend negotiations of water rights in Washington, defended the reduced fees and questioned Harmon’s figures.

“These people who are due the reductions are the ones who built the system. I think that they deserve (reduced rates) but I don’t think that they need $40 million.”

George Lohnes, city utilities engineer, admits that the ordinance that grants the windfalls to longtime water customers “is a double-edged sword”--newer water users protest that they are bearing more than their fair share of the water system because older water customers are eligible for rebates.

However, the ordinance will not result in higher water rates or connection fees for others, Lohnes said.

“Our present water rates will carry us, at least for the present,” he said, “unless other, unforeseen things come into the picture.”

Lohnes and Public Works Director Dennis Wilson stressed that the ordinance was not designed as a growth-control measure or as a water conservation method.

“It was designed to prevent longtime water users from having to pay twice for their hookups,” Wilson explained.