Water District Rate Hike Awaits Action by State

The Casitas Municipal Water District is holding off on a proposed rate hike until officials determine whether the state will take away nearly $1.5 million in property tax revenue the district has received annually since 1978, officials said Wednesday.

Several members of the district’s board of directors said they have considered a third rate increase in a year to help cover a $225,000 gap in the district’s $6-million budget from last year.

But board members said they are trying to avoid passing another increase on to the district’s 2,800 customers. The district covers most of the Ojai Valley and a portion of the city of Ventura.

This year’s budget, passed June 23, took the $1.5-million loss in revenue into account. But the board was forced to dip into its $4 million in cash reserves to balance its budget.

The agency is hoping to recoup a majority of the losses by boosting water sales to resale agencies and the public, said John Johnson, the district’s general manager. It is also banking on revenue from a proposed 300-acre recreation area near Lake Casitas that includes a 27-hole golf course and two dozen rental cottages.

Many of the district’s residential and agricultural ratepayers have lobbied the board in recent months at public hearings to keep the rates at current levels. The rate for the average residential customer is about $30 a month, Johnson said.

“The people in the community have indicated to the board that the economy won’t bear another rate increase,” Johnson said. “My feeling is that the board does not want to pass on another increase.”

Last month, the board directed a committee made up of two board members and several district employees to examine the state’s budget to find out if the revenue has been transferred to fund state education. The committee hopes to have a figure for the projected losses by the board’s Wednesday meeting, Johnson said.

The district has received 1% of property taxes collected from owners located within its service area since Proposition 13 was passed in 1978, Johnson said. Since June of last year, the district has raised its rates at least 24%. Its largest increase was a 14.8% hike in January.

Last year, the state cut $473,000 from the district’s property tax revenue, prompting the agency to seek two rate increases to make up for the shortfall, Johnson said.

The district also has implemented a hiring freeze, not replacing 13 employees who have retired or left the agency during the last four years.

The cuts, however, haven’t affected the agency’s service to ratepayers, Johnson said.

“The board takes the position that if you’re careful and you manage your money better, you can still provide the services,” Johnson said. “Those services have been absorbed by the other employees.”

But Phil Colbert, an Ojai farmer who owns an orange orchard, said he is not sure the district will continue to hold the line on a rate increase this year.

“It’s a real touchy subject with us farmers because we don’t like how they operate,” said Colbert, who said he thinks many farmers might go out of business if rates are raised again.

Each year, the district collects about $885,000 from residents, $1 million from agricultural users and $900,000 from resale companies, Johnson said.

Board member Conner Everts said he is confident that the board can avoid another rate increase this year, in part because of the public outcry against it.

“We’ve responded to the public hearings and made some adjustments to the budget,” said Everts, who represents the city of Ojai. “We’ve already assumed that we are going to lose the property tax money.”

Everts said board members are concerned that if rates are raised too much, ratepayers, especially resale agencies and farmers, will choose to build ground wells to circumvent rate hikes.

“We’ve absolutely trimmed the fat off the budget,” said board member William Austin, who represents portions of the city of Ventura. “Certainly, we don’t want to increase rates more than we have to and run (farmers) out of business.”