Fiscal concerns go unanswered as MWD raises more revenue from taxes

For the fourth year in a row, a majority of MWD’s board of directors have voted to raise even more revenue from property taxes despite no analysis to demonstrate why the increase is “essential.”   MWD is required under the law to demonstrate fiscal necessity before raising more money from property taxes.

In a letter to the board opposing the increase in tax collections, the San Diego County Water Authority raised issues about the actual necessity and legal justification for the action, including:

  1. MWD collected nearly $1 billion more than necessary to pay for all of its costs, and then spent all of the money on unbudgeted expenses. This spending spree calls into question the essential nature of the additional tax revenue, which is supposed to be a legislative litmus test for raising property tax collections.
  2. MWD can raise money from other sources of fixed revenue that would more equitably charge users based on the service provided.  For example, in April, MWD chose to lower its standby and readiness to serve charge for 2017 and 2018.  (These are fees charged to recover system costs associated with being ready to meet an immediate request(s) for water supplies from its member agencies.)  MWD cited “uncertainty,” “risk” and additional legal requirements associated with the continued use of these fees, but staff gave no analysis or detail about the nature and extent of risk and uncertainty.
  3. MWD’s reasoning for limiting the tax suspension violates the requirements of the MWD Act.  Further, the action based on the future costs of building the twin tunnels also known as the California WaterFix.  The board has not taken a formal position nor voted on approving additional expenses associated with these new costs.  Unless and until the board approves the project and the associated costs, the additional tax rate revenues are not justified.

To read the Water Authority’s concerns, and a historical background on the property tax issues, click here: