Countywide : Water District Drops Plans for New Fee

The Municipal Water District of Orange County on Wednesday scrapped a controversial plan to add a water supply fee to property tax bills.

The fee, originally proposed to cover added charges levied by the water district’s supplier, the Metropolitan Water District, was hotly contested by residents. They said at a public hearing last week that the Municipal Water District should find ways to trim expenses before imposing fees.

But the proposal became a moot point Tuesday when the Metropolitan Water District rescinded the $25-million “service availability charge” it planned to levy on smaller water agencies throughout Southern California. The Municipal Water District’s portion of that charge was to be $3 million, which it had planned to recoup by tacking an estimated $7 to $10 onto customers’ November property tax bills.

The Metropolitan Water District, however, retained a plan to raise $25 million with a $5 annual “parcel tax” that will be charged to millions of landowners in the six-county area it serves. The money is slated for capital improvements, including upgrading the existing water supply system and building more water storage facilities, Carl Boronkay, its general manager, said.

Metropolitan Water District’s decision to rescind the service charge was in response to a finding by the state attorney general’s office, which said that the water district could not impose both a service charge and a parcel tax.

The Municipal Water District’s board of directors voted unanimously to drop the surcharge on property tax bills.

“There was considerable concern about our district implementing a (a surcharge on property tax bills) as a new source of revenue. Some would prefer it be put directly on the water rates,” said Wayne Clark, one of five board directors.

He added that the surcharge was only being considered in response to the Metropolitan Water District’s plan.

Now that the Metropolitan Water District had scrapped its plan, the Municipal Water District is left with bills incurred developing a plan to recover the costs of the charge the former was going to impose.

“We had a contract in the neighborhood of $400,000 annually with a consultant to keep a database updated and to develop the” surcharge on property tax bills, said Keith Coolidge, a spokesman for the Municipal Water District. “That was going to be funded by the (surcharge). Now, we’re going to have to review how much has been spent and where it’s going to come from.”

Coolidge estimated that the Municipal Water District has spent between $175,000 to $200,000 on consultants. The water district is now seeking ways to absorb that cost.

“Of course all work on the plan has stopped as of Tuesday,” he said.