Countywide : Customers Protest Plan for Water Fee

About 50 people turned out at a public hearing Thursday night to protest a proposal by the Municipal Water District of Orange County to add a water supply fee to property tax bills.

The fee, proposed to cover added charges levied by the water district’s supplier, the Metropolitan Water District, was denounced as unnecessary during the hearing at Costa Mesa High School. Residents urged board members of the Municipal Water District to find ways to trim expenses before imposing fees.

“We oppose any rate increase until it’s been demonstrated that all other avenues of reducing costs have been explored,” said Tustin resident Ray Harbour, whose comments were met with a burst of applause from the audience.

The charge would tack an estimated $7 to $10 onto November property tax bills to cover an additional $3 million in charges for the 1992-93 year from the Metropolitan Water District, a wholesaler to local water districts.

Under the proposal, anyone who owns less than one acre of land in cities that receive water from the Municipal Water District will be charged a maximum of $10 per year. Owners of more than one acre will pay a maximum of $10 per acre annually, said Stan Sprague, general manager of the Municipal Water District.

Residents in Anaheim, Fullerton, Newport Beach, Laguna Beach, Dana Point and San Clemente, which buy water directly from the Metropolitan Water District, will pay a fee directly to that agency, but it has yet to be determined whether that fee will be levied through a property tax or a surcharge.

The Metropolitan Water District in May adopted a 10-year, $6-billion capital improvement plan that will pass on to customers the cost of revamping the district’s water supply system and building more storage facilities. Metropolitan’s board determined that $50 million was needed to begin projects in 1992-93.

In the past, Metropolitan relied heavily on revenue generated from water sales to cover ongoing, fixed expenses such as payments to the State Water Project, long-term financing and staff costs, said Carl Boronkay, general manager of Metropolitan. But relying directly on water sales was considered too much of a risk for capital improvement projects because of variances in supply caused by drought and other factors, he added.

Instead, Metropolitan’s board chose to raise the $50 million through two sources--half through an annual charge that places a $5 fee on all property owners’ tax bills, and the other half through an annual service charge on all local districts that buy their water, Boronkay said.

The Municipal Water District’s response was to consider imposing its own fee to cover the service charge, but a recent opinion by the state attorney general’s office may make Thursday’s public hearing a moot point.

The attorney general’s opinion stated that imposing both ends of the fund-raising plan may constitute double taxation. Metropolitan’s board will decide Tuesday whether to challenge the attorney general’s opinion in court or come up with another plan.

Municipal officials speculated Thursday that Metropolitan will drop the service availability charge, thereby rendering Municipal’s standby charge unnecessary.