Happy New Year

Happy 2012!

New year, same ol' shit????

Nope. Not this year. Because of a California Supreme Court decision, redevelopment agencies will cease to exist on February 1, 2012. That will mean some big, big changes for Poway and hundreds of other California cities. You can be sure I will have lots to say about it soon, but here is a little hint: It's all about the $$$$$$$$$$$$$. Every redevelopment agency was required to work up an EOP (enforceable obligation payment schedule) of all their bond debt, contracts and other obligations for payment. Poway's total on the Oct 1, 2010 document? It's $1,398,802,316.43. Almost 1.4 billion taxpayer dollars diverted from schools and core government services. In little ol' Poway. To clean up our urban blight. They are crying a river over losing that money stream.

(note: Poway revised their EOP after the supreme court decision. The new EOP (1/17/2012) total: $0.4 billion. That's a billion dollars less that they will be spending now that redevelopment agencies will cease to be. Half that billion dollars will go to our local schools. They other half will mostly go to the county and come back to the city's own general fund for core services.)

Unfortunately for Poway sewer customers, it is the same ol' shit for 2012. On December 20th, the council voted to reduce the sewer consumption charge by 7%. Note that the word is charge, not rate. Poway doesn't charge for sewer use by the unit, the way they do for water (and the way other cities do for both water and sewer). They use an archaic tiered fee structure. It is an adaption from the days when everyone just paid a flat sewer fee and no separate consumption fee. Now, we all pay a flat service fee AND a consumption fee, but the consumption fee in Poway is not a rate as it is in other cities. Poway, charges a consumption charge of $40.98 to sewer customers who use between 6-12 units. That means that the customer who uses 6 units pays twice as much per unit ($6.83) as the customer who uses 12 units ($3.41 per unit). Poway gives an even bigger price break to the biggest sewer users. Customers who use 50 units of sewer flow pay only $1.83/unit. Is that fair? Or even logical?

Poway can afford to cut the sewer rates because they have a big surplus in the sewer fund. They have been overcharging customers for years, and, in particular, overcharging smaller users. What's amazing is how the city continues to use the sewer slush fund for non-sewer related expenses. Last year they completed a sewer project on Oak Knoll Rd that was paid for with redevelopment funds. But since they needed $3 million dollars to move Toyota across the street and shoehorn a Lowes in Toyota's old location, they took $3 million from the sewer fund and put it into the redevelopment fund to "backfill" the Oak Knoll project and then they moved it into a fund to buy property for Toyota.

The sewer fund is also tapped to pay the bonds on the new city hall. Most of the water/sewer services are run out of the city's operations center building near Lake Poway. So why are water/sewer customers paying for city hall? I guess we have to pay for the administrative staff who dream up new ways to soak us unfairly. Some of the council members who voted to make the sewer customers pay for the new city hall are on septic systems and don't help pay for those bonds themselves.

Remember the old water/sewer building on Poway Rd., right across from the library? That building was paid for by water/sewer customers, too. After it was no longer needed for the water/sewer department use, it was "quit claimed" to the city. The water/sewer ratepayers paid for the building, but we got nothing for it. Now the city leases it out. Does the lease money end up in the sewer fund? Nope. If the city sells the old building, will the sewer customers see the assets returned to the fund that paid for the building? Not likely.

Redevelopment owes the sewer fund a big bunch of money too. In 1983, Poway sewer customers forked over $5.5 million to jump start the newly formed Poway Redevelopment Agency. How did the sewer fund have an extra $5.5 million in it to lend to redevelopment? If I remember correctly, our rates were hiked up to minimize the stress of potential future rate hikes. I am not sure we will ever get all of that money back from the soon-to-be-defunct redevelopment agency. Does that make you feel de-stressed or distressed?

But that isn't all. The lush sewer funds are being used to pay the legal bills for a 5-yr long saga of negligence, irresponsibility and retribution. I'm talking about the Tartre/Armstrong case. Five years ago, the city hired a company to clear some trees on a sewer easement. They oopsied. They were supposed to cut down a total of 25 mature trees on 9 properties, but they took out way more than that. Of the 41 trees they removed from the Armstrong's and the Tartre's backyards, only 1 was in the sewer easement. The city admitted that they messed up and said that they used a map with the easement marked incorrectly on it.

The Tartres and Armstrongs wanted the city or (West Coast Arborist), the company that the city hired, to replant mature trees, fix the creek that they damaged and leave them alone. They filed a claim with the city. The City retaliated by citing (resolution 08-004)the Tartres and Armstrong with some PMC (Poway Municipal Code) and FEMA violations on their property. The City claimed that their fences were in a special flood hazard area and that they had to remove them or get a special permit that required a $30,000 flood study. Instead of working to make things right, the City puffed up their chest and said, "You take what we offer or we will make your life hell." And then the City proceeded to make their lives hell.

After the City refused to fix their properties, the Tartres and Armstrongs filed a lawsuit over the property damages. In a tit for tat, the The City sued the Tartres and Armstrongs over the PMC and FEMA violations. It didn't matter if the Tartres and Armstrongs won their lawsuits or if the judge noted that the City's case "smacked of retaliation", the City was (and still is) hell bent on sending a message: "Cross us and we will make your life miserable." And why not? Those excess sewer funds were just sitting there waiting to be raided to pay for the City's bullying.

Five years of hell. And it is not over yet.

Here is a summary of where things stand.

There are two main cases:

1)Appellate Court Case No. D056319

underlying case 37-2008-0076297-CU-NP-CTL

This is the Tartres/Armstrongs suit against the city and their contractor West Coast Arborists for damages to their property, emotional distress, and civil rights violations.

In June, 2009, a jury decided that Poway had been negligent and awarded the Tartres and Armstrongs damages for negligence and emotional distress ($119,810 for the Tartres and $67,462 for the Armstrongs). In Dec, 2009, Judge Link denied the City's request to undo the jury's decision and awarded the Tartres and Armstrongs $479,000 for attorney fees and legal costs. The Tartres and Armstrong were also required to pay the legal fees for West Coast Arborist.

Neither side was totally satisfied with this result. The City of Poway is appealing the civil rights violation portion of the decision. If the City wins, they won't have to pay the $479,000 in attorney fees; if they lose they will owe an additional 10% interest. The Tartres and Armstrongs are claiming civil rights violations and also that the arborist the City hired was responsible, in part for a portion of the damages. If they win, they won't have to pay the arborist's fees. If they lose against the City, they may have to pay the City's attorney and legal fees. The Tartres and Armstrongs final brief is due on Jan 20th, then oral arguments will be heard. The court will decide the case between April and June of this year (2012).

2) Appellate Court Case No. D055225

underlying case: 37-2008-00081870-CU-WM-CTL

This is the Tartre/Armstrong Writ against the city council after the city hit them up with PMC (Poway Municipal Code) and FEMA violations.

This case is almost concluded.

Judge Lisa Foster ruled that Poway messed up, didn't follow their own municipal code, got the FEMA thingee wrong and that Poway needed to take back their resolution (#08-004), harrassing demanding that the Tartre and Armstrongs pay for an expensive flood study and get permits for their fence, which the city claims is in a FEMA floodplain. The judge made that ruling almost 4 months ago. The council still has taken no action to comply with one part of the court order, the requirement that the Poway City Council rescind resolution 08-004.

Hmmm, I remember another case when the City Council allowed some residents to build a private gate across a public road. One of the people who lived on the road sued, and won his case in court, at great expense to himself. The city took their sweet time complying with that court order too. They didn't rescind their approval of the gate and demand it's removal for weeks after the court's decision. Respect for the courts much? I don't think so.

The Tartres and Armstrongs have to drag the City's sorry ass back to court and let the judge slap them upside of the head to make them comply. Last week the judge ordered the City to comply with her order or explain themselves at yet another hearing on April 6, 2012. The City knows that they have lost, but they have one last opportunity to taunt their own residents. And why not? It's not their money that is paying for it.

The City is paying for their attorneys and legal fees out of the sewer slush funds. I don't know why. The cause of the problem was bad maps (so said the City) and a bad attitude (so said the judge). I'm not sure which city department is responsible for mapping expertise, but whichever one it is, I think that department and the City administration owe a reimbursement to the sewer fund. The City's attorney costs were $354, 461 (as of June, 2011) for the first case and $83,553.36 for the second case (as of Jan 3, 2012).

If I was a member of the Poway City Council or staff, you know what I would do? I'd make some new year resolutions. First, I'd make 2012 the year Poway gets its act together and charges fair sewer rates. And secondly, I'd make a huge attempt to reform what seems to be a retaliatory bullying habit. It's nasty. It's embarrassing. It benefits nobody except the lawyers. It makes the city look like it is poorly run. In fact, it makes it look like it is run by a crime family, rather than a government that works for its own people.

2012 is going to be a big year of changes. Is it too much to hope that the changes will make Poway a better place to live?

CatchAll

• Redevelopment Update: Poway opted in to the "alternate" redevelopment agency. They are paying their "extortion fees" and hoping that the California Redevelopment Agency (CRA) wins their lawsuit against the state. The state's response to CRA's lawsuit: We made redevelopment, we can do away with it. CRA: Waaaahhhh!, we need that money, give it to us. The people said to give it to us. Who will build golf courses, new Charger stadiums, shopping centers and car dealerships if you don't give it to us? Next up: the California Supreme Court will decide to fast track the case or send it to the lower courts where it will take forever and an eon to be heard.
  
  
• Poway's reason for an emergency council meeting to keep medical marijuana collectives out of Poway: We can't let our neighborhoods deteriorate. Ha! Ha! You know what that reminds me of? The reason the city gave for pulling the Wal-Mart property out of the Poway Road Specific Plan and forming a new Wal-Mart Specific Plan: to limit uses which might bring increased traffic volume, flow and noise that would be incompatible with the nearby commercial and residential areas. Ha! Ha! Ha! Joe St Lucas has a few comments about the city looking out for our quality of life over at his blog too.
  
  
• It's been a year since the Poway City council voted to chuck the multi-tier water rates because it "wasn't fair" that some people were paying more for their water than other people. It's been a year since the city has done nothing about the sewer rates which charge higher rates to those who use the least water.
  
  
• The Poway Term Limits group is gathering signatures. I support term limits for Poway councilmembers and mayor. After hearing all 5 council members whine because the state is giving local property tax dollars back to the local schools to be spent on local public services instead of letting redevelopment agencies spend it on their favorite private enterprises, well, I'm beginning to think that even 2 terms is too long.
  
  
• Mark your calendars. August 23 will be a hearing for the Wal-Mart expansion environmental impact report. I'm betting that the staff recommendation will be that the neighborhood adjacent to Wal-Mart will be greatly improved by the increased traffic and noise. Unloading trucks in the wee hours will be just like white noise lulling your baby to sleep. But a store like that, heck, ANY store would be so uber incompatible in north Poway.
  
  
• The Arbolitos sports field lights are going in soon. The gnatcatchers didn't stop it and neither did 2 council members living nearby. It is going to be more costly than expected. The city engineer estimated it would cost $600,000 - $610,000 for the lights and field renovation, but the lowest bid came in at $781,645.50. Total appropriation, including legal fees is $950,000. PYSL kicked in $60,000.
  
  
• I've saved the best for last. I won't be getting robocalls from Duncan Hunter, June-Eyore, much longer. The bi-partisan California Citizen's Redistricting Commission approved new maps for California Senate and Assembly seats and Congressional seats. Poway won't be in Duncan Hunter's district after the 2012 election. Poway will be in a Congressional district that includes much of the City of San Diego that lies between Poway and Ocean Beach. This district leans a lot more to the left than Poway's current Congressional district. I'm sure it will be an interesting election year, and all, but isn't it amazing that the bi-partisan California Citizen's Redistricting Commission actually agreed to something? Without much fuss, too. Hmmm, next time, could they be in charge of raising the debt limit?

"Tis The Season...to Save on Your Sewer Bill

We don't have sewer meters in Poway.

Yet, on every bill we get charged a "sewer commodity charge".

Sometimes the sewer fees and sewer commodity charge make up more than half our bills.

Since we do not have sewer meters, how does the city know how much to charge us?

They guess.

The guess is based entirely on a customer's water use during a 2-month period in the wintertime. Water use during the rest of the year doesn't affect your sewer bills at all. To lower your sewer bill, you need to lower consumption during your special 2-month lowest winter water period.

Note: The City of Poway uses an entirely different method to calculate sewer consumption for apartments and condos. This post only refers to sewer fee calculations and hints for single family homes.

The exact methodology the city uses involves averaging the lowest wintertime water use from the last 3 years and then multiplying that average times 85%. So, if your lowest winter water use in the last 3 yrs was 18 units, 10 units and 15 units, the average would be 14.3 units. Multiply that times 85% = 12.2 units. 12.2 units puts a customer just into Tier 3 of sewer billing, which currently costs $76.25 each billing cycle. If this same customer reduced his/her water consumption by just 1 unit during that time, his/her average would drop him/her to Tier 2 which costs just $50.65 each billing period. That's $153.60/yr less, just for reducing water consumption a little bit during a 2-month period in the wintertime.

Lower sewer fees will go into effect in January, but the pricing between the lower tiers is still pretty steep and makes it worthwhile to reduce water consumption for a limited period to get in, or stay in a lower sewer tier.

How do you know when your special 2-month lowest wintertime use is? For almost everyone, it will be in Dec & Jan or Jan & Feb. I get my water bills in Jan/Mar/May/July?Sept/Nov.

My lowest water use is always in the March bill, which covers the 2-month period in January and February. People who get their bills in Feb/April/June/Aug/Oct/Dec will likely find that Dec/Jan is their special 2-month period when it will pay to reduce water consumption.

To determine the exact day the special period starts, you have to know when the meter reader reads your bill. I called the city and gave them the first 3 digits of my account number. They told me what week the meter reader will come, but if I want to know the exact day, I think I will have to employ some of the same strategies I used to keep an eye on my liquor bottle(s) when I had teenagers around. I will need something bigger than a hair laid across the meter cover. Maybe a stick will work, or a piece of tape across the hole in the cover. Barring that, I may just have to count on the whole week being in the conservation period.

Below are some Poway Blog hints for reducing water consumption during the 2-month period:

1. The Garden. Turn off all irrigation. Don't turn it on unless you really need to. Autumn rains have been really helpful so far, but if late December looks like a long dry spell, I will water my landscaping before my 2-month low-water-use period starts. That way, I will be able to coast as long as possible without irrigating. Keep an eye on potted plants. They may need hand watering.

If you are going to plant new plants or a new lawn area, wait until after your 2-month period is over. Then you will be able to keep them watered in a dry spell.

2. Don't change your pool water. At lot of my water-wise hints are really about timing. If you need to empty and fill the pool, do it before or after your 2-month low winter-water use period.

3. Showers. Take shorter showers or less frequent showers. Shower at the club, school, wherever else you can. Promise your teenager that if they take short, quick showers during this 2-month period, you won't nag them about long showers for the rest of the year. Those long showers might cost a buck or two more here or there, but getting bumped up from tier 2 to tier 3 costs $150 more per yr for the next 3 yrs. in sewer fees.

4. Laundry. Don't change the sheets as often. Let the laundry pile up at the end of the 2-month low winter water period until your meter has been read.

5. Recycle. I'm not a big fan of carrying water out of the bathroom in buckets to use in the yard. Maybe it is because I don't have an enormous amount of room in the bathroom to share with a bunch of buckets and pails. Large buckets of water can also be deadly with small children around. But I will stick an empty trash can under a gutter leak. If it rains a lot, the can will swell and look like it is going to explode, so I transfer some of the water into some empty containers. I'm not going to leave water stagnating for months to attract mosquitos, but for a short period, I will save it for use elsewhere in the yard, especially for potted plants.

6. Kitchen. Throw potato peelings and other kitchen food waste into the trash instead of running the disposal. Yeah, it fills up the landfills sooner, but guess what they do with all the green waste that is collected? They throw it on top of the other trash in the landfill. Kitchen scraps will decompose just as readily as green waste, so if nobody is worried about the green waste, they better not cry about kitchen scraps in the garbage.

7. Vacations. Plan your vacation so you will be out-of-town during this 2-mo period. And be sure to take a shower that last morning in a hotel or at a friend's house.

Try to get relatives to come to visit at another time. Ha! Ha! We actually don't do this ourselves. We seem to have company at this time every year, so I do the best I can to get the sheets and linens washed and ready to put up before the 2-month period. One or two showers by our guest won't throw us off that much.

These are our favorite strategies for keeping our water use low during the sewer calculation period. What strategies do you use?

Protest

Protest Poway Sewer/ Water Rates

I have been on a mission for the last 18 months or so, trying to get the city to change the sewer

fees to a uniform unit rate. Currently, the sewer fees are structured so that those who use the

least pay the most. The sewer fee structure also has these screwy irregularities in it that could

result in a single drink of watercosting a customer $150 more over the next year.

Every one of the current council members has been deaf to my pleas. So I found it very

interesting to watch GVCA leaders and the large lot owners hyperventilating one summer

evening in the council chambers, proclaiming that it wasn't fair that the folks who used the

most water would have to pay more for it. They even said it was illegal, because if some people

were paying more for water, then they were "subsidizing" the people who were paying less per

unit. Now you have to remember that some of these folks were getting a "discount" on their

large volume water purchases just a year or two ago.

Hmmm, when they get cheaper rates, it isn't illegal or a "subsidy," it's a "discount."

Nevertheless, with their shrill sense of unfairness and injustice, I figured that at least a few of

them would want to join my efforts for uniform sewer rates. I figured wrong. The GVCA has not

asked the council to do diddly about the sewer rates. They are not interested in fairness or

justice; they are only interested in their own advantage.

There was a letter to the editor in this week's Poway News Chieftain. A certain Sylvia Ginsberg

responded to Marijo Van Dyke's previous letter complaining about the city abandoning

conservation water rates at the request of the GVCA.

A homeowner with a larger family or lot uses more water no matter how much they conserve. The five- tier system is unfair and a detriment to the conservation efforts. Tier 1 doesn’t even cover what Poway pays to buy the water. Apartment dwellers and businesses are charged the Tier 1 rate, no matter how much water they use. Homeowners are billed according to the five-tier system: if you use 15 units or less you’re billed at Tier 1 — once again, less than the cost of the water. How does this encourage conservation?

The five-tier system not only penalizes high water usage, but also subsidizes Tier 1 users. Are you charged a higher price for gas because of the vehicle you drive and the gas mileage it gets? Same thing here.

Ms Ginsberg seems to be really worried that she might be paying more for water than an

apartment dweller or a businessman. What if the shoe was on the other foot? Would she want

it changed? Probably not. Oh wait! The shoe is on the other foot. Ms. Ginsberg is wrong.

Apartments, condos and businesses were never, ever in tier 1. The tiers were only for single

family ratepayers. Condos, apartments and businesses all were assigned a rate equal to the rate

in Tier 3. The new rates, which will kick in in January, will be $4.10 per unit of water for condo,

apartment and business users. For the water gluttons in north Poway? They will be

charged $4.02 for their first 199 units of water.

OMG!!!!!! The water hogs are being subsidized.

And it isn't just their water rates. Large lot owners have the lowest sewer rates in town.

For using 50 units of winter water, they will be charged less than $2.00 a unit, which is less than it

costs to have that sewage processed at Pt Loma. Single family homeowners who use 12 units

will pay $3.67/unit. Condo owners, apartment dwellers and businesses will pay $3.40/unit.

OMG!!!!!! They are really, really being subsidized.

And, by the way, when you buy gas, you pay a tax proportional to the total amount of gas you

buy. Buy water in Poway and you pay a tax called a "fixed fee". But it isn't proportional. The

same fee is charged to the person buying 15 units as to the person buying 200 units. How is that

fair?

What can we do?

1. Click on the fullscreen link above the letter to make it larger. Print it, fill it in and mail it to

the city.Email a link to this blog to your friends so they can protest too.

2. Do not vote for any of the incumbents in the next election. If we don't elect some other

people, we will get stuck paying subsidies to the large lot people from the GVCA forever.

Bidness As Usual

irrigation water in the gutter in Arbolitos

Last (Tuesday) night, I wasted a few hours attending the workshop on the proposed water and sewer rates. There were mostly large-lot folks from north Poway at the meeting and they got what they wanted. The city is going to bail on the 5-tier conservation water rate structure and go with a 2-tier system. Everybody will pay $4.02/unit for their first 199 units in a billing period. The 200th unit on up will cost $5.74/unit. 200 units in one billing cycle is an ENORMOUS amount of water. It is way more water than the Cruse household uses in an entire year. Hardly anyone in Poway uses that much water, so for all practical purposes, we are back to a flat rate for most everyone.

Those of us who use less than 125 units in a billing cycle will see the water consumption part of our bill jump about 20%. The large-lot people who consume between 125-200 units in a billing cycle will see their water consumption bills jump about 10%.

The city will have to spend thousands of dollars to send out mailers (required by Prop 218) and give everyone notice of the changes and an opportunity to fruitlessly protest. Then in October, the council will lock in the new rates with a vote and they will become effective in January, 2011.

Last night's meeting went pretty much as I expected. A consultant presented several water and sewer rate options. Well, really just one sewer rate option and four water rate options. The four water rate options offered a choice between a 5, 3, 2 or no tier(s) structure. The first public speaker was Bruce Tarzy from the GVCA. Tarzy had already had a meeting with staff where he presented his 2-tier plan.  For months now, I have been hearing about how unfair it is that some people pay a different water rate than others, that some pay less than the cost to provide the service and are subsidized by others. So, why a 2-tier plan instead of a uniform unit rate? I'm not totally sure I get this, but from what I was hearing, it goes something like this: Everybody should pay the same rate. Except the people who use more than 200 units. Because they really need to learn to conserve. So, they have to pay more. As a result, the large-lot people are gonna get subsidized by the handful of super-large-lot people. And they seem OK with that. Advantage is relative.

After the people had their say, the council weighed in. Newbie John Mullin seemed to still be fond of a uniform unit rate. Jim Cunningham went next. If Cunningham had to be succinct to save his life, he'd be a goner. You can watch the replay, or if you want, but my analysis is that Cunningham's verbage amounted to: "What Tarzy said." Same with Carl Kruse. Next up was Merrilee Boyack. She wanted Don Higginson to go first, but he insisted that she state her position next. Boyack asked a few questions, but went with the Tarzy plan. Ditto the mayor.

I requested to speak during the public comment period. I wanted to address the sewer rates, or fees, as they are more appropriately called. I pointed out that we were all paying different rates. I even gave some examples of anomalies caused by the crazy tiered sewer fee structure:

1.)   Even when someone uses no water at all, they have to pay a minimum of  $45.00 for not using the sewer.    

2.)   The jumps between tiers are irregular.  A single extra shower or load of wash taken during the winter months could jump a user’s bill from  $304 to $458 per year.  That’s a $154 shower or load of wash or drink of water.

3.)   The person who uses 6 units of water pays the same total amount as the person who uses 12 units of water. How can this be conservation pricing when someone gets twice as much for the same price?  The person who uses 6 units pays twice the rate of the person who uses 12 units.

4.)    In general, the per unit cost for the sewer decreases as sewer use increases.

Well, I found out that the large-lot people and the council's passion for equity applies to water rates, but not to sewer fees, especially sewer fees that are tilted to their advantage.  Mayor Higginson, who interrupted me twice to hurry up with my comments, did not address my concerns. Neither did Boyack or Kruse. I am not sure if I heard correctly, but I think Mullin may have said something about looking into the sewer rates. To his credit, Jim Cunningham asked the staff about the sewer rates; staff told him there wasn't time for it this year, not enough time to get something sent out to the voters and ready for the October vote, it would have to wait.

So, there you have it.  Yep, I took the time to attend the water and sewer rate workshop. I stood up and spoke in front of a roomful of people who were seething with the injustice of unfair rates. I addressed a council that I had pre-sensitized for months with a barrage of emails and copies of my blogs. I'd even met with the staff and was the one who pointed out to them that there was quite a surplus in that sewer fund. And the response? There isn't time to fix the sewer rate structure.

Like I said, I wasted a couple of hours last night.

Poway's Sewer Slush Fund

In my last post, I tried to explain some of the anomalies and inequities in the way Poway charges single family home ratepayers for using the sewer. In this post, I am going to show that Poway has collected way more money than it needs in sewer fees and not all of that money even goes to pay for sewer-related expenses.
To get an idea of how much money goes into and out of the Poway sewer utilities fund, I looked at the most recent budget documents. (note: Staff is currently working on the next budget. Until they release it, this is the most current document.)

Sewer Utilities Fund 2006-2010

The budget documents cover the years from 2006-2010. Although the last years are not yet in their "actual" form, the proposed numbers  should be pretty close to what the actual numbers will be.  In each of the budget years, you can compare the total operating expense (red box) to the revenues (green box).  Notice that in every year, the revenues are 1-2 million more than the expenditures.  Even when the capital projects are added in, the total expenditures were less than the total revenues in every year except the year 2006-7. The result of the sewer fund taking in more money than it was paying out is  that the sewer fund has about $11.861 million extra dollars in it.

The main costs that are charged to the sewer fund will always be "public works" and any capital improvement projects. Public works includes the charges Poway has to pay to have the sewage treated and the costs for Poway employees who work on our sewer system.  This FY (fiscal year), the public works costs are expected to be $6.43 million.  An additional $1.237 million goes for administrative,legislative and development services and something called "indirect cost allocation". Those administrative/legislative/development/ (and whatever indirect cost allocations are) tally up to almost 20% of the public works cost. That is a lot of administrative overhead.  But for the moment, let's assume that the City can justify dinging the sewer fund for money to pay the costs of running the city manager's office other administrative offices.

The sewer fund is pretty flush, with $11.861 182 in excess funds. But there is more.
More? How? See the line that says "TOTAL TRANSFERS/LOANS"?  In 2009-10, the sewer fund is expected to transfer out almost a million bucks- $861,460, to be exact.(BLUE CIRCLE)
Transfer Loans Sewer Fund
 $111,460 of that was to go for paying off "city debt service"(pay off bonds for the new city hall)  and $750,000 was to be a loan to the Water Fund. A loan to the water fund? The city just raised water rates, but deferred raising the rates on the higher tiers because the fund was flush with money.  Let's hope they are so flush, that the water fund doesn't need that loan from the sewer fund after all.

You know what's really weird about the sewer fund loaning money to the water fund? Well, besides the fact that the staff said that they don't need to raise the higher tier rates because they have enough money in the water fund? Well, the water fund has a loan to the redevelopment fund on the books. Yeah, really. The water fund was gonna borrow from the sewer fund, and all the while they have millions loaned out to the redevelopment fund and the redevelopment fund hasn't paid it back yet. Instead of the water fund going to the redevelopment fund and getting their loan money back, they go begging to the sewer fund for a loan. The sewer fund is the "go to" fund. Sweet, isn't it?  Especially since not everybody pays into the sewer fund, and the rates are constructed so that those who use the least, pay more per unit.

If you look in the blue box in the document above, you can see that every year the city takes some money from the sewer fund to help pay for the new city hall (city debt service fund).  In 2009-2010, they expect to take $111,460. The city also takes some money from the water fund to pay off city hall.  I would have expected that property taxes would be the main source for funds to pay off a new city hall, but a lot of property taxes in Poway are diverted into the redevelopment agency, so I suppose it was one of those "no brainer" things to raise water and sewer rates to pay off the new city hall.  Not everybody is on the sewer or pays sewer fees. In fact, several of our councilmembers are not on the sewer, but they approved the new city hall and hiked up water and sewer fees so that those on city water and sewer can pay for it.

Before Poway incorporated, we had a water and sewer dept. The city currently owns the old water dept building on Poway Rd (across from the library.)  Recently, Tina White, asst city manager, mentioned that the City intends to sell that building.  I'm not totally positive, but I expect that building was paid for by bonds which were paid off by Poway water and sewer ratepayers. If I am correct then I think that when the building is sold, the profits from the sale of that building should be returned to the water/sewer ratepayers. That seems only fair since we paid for it.

The blue box (in the document above) also shows that the sewer fund has loaned money to at least 4 other funds- redevelopment, CFD 88-1 (bonds to build the industrial park), the water fund and the
drainage fund.

Certainly it does make budgetary sense to transfer money between funds, especially on a short term basis. If something unexpected comes up, a loan from another fund can mean that the city saves the costs of borrowing new funds. For example, the sewer fund loaned some money to the drainage fund in 2005-2006, which it repaid in the following year. But not all the loans were short term.

According to Peter Moote, Asst Dir of Administrative Services, Poway, there are 3 loans from the sewer fund that have not yet been paid off.

1.  $5.5 million remains of the loan to the redevelopment agency. This loan was made in 1983 or 1984.
2. $1 million balance on the loan to community facilities district (CFD) 88-1 (to pay off bonds for the industrial park). This loan was made in 1994.
3. $214,500 still owed on the Street Development loan from 1993.

Water/Sewer Loan to Redevelopment

I don't know why the loan to CFD 88-1 wasn't paid off already. I know the sewer fund lent money to them because the redevelopment agency was going to default on the bonds when all the developers in the industrial park were going bankrupt, in the early 90s. But I thought that Poway brought in McMillan and worked out a deal with McMillan, where McMillan  paid off the bonds in return for future tax increment of  properties in the industrial park. So, how is it that the sewer fund didn't get paid off?

Poway's redevelopment fund owes money to both the water and the sewer fund. According to city manager Penny Riley, the $13.7 million that Poway had to give back to the state, was only about a third of this years redevelopment income. If Poway has $40 million coming in from redevelopment every year, why can't redevelopment pay back the sewer fund? And the water fund? Sheesh, those loans go back to 1983.

Poway made such a big deal about having to send that $13.7 million check to the state. $13.7 million is a lot of money. But it isn't even close to the amount the city has over-collected from sewer ratepayers. The sewer fund has a total of $6.7 million in loans on the books, $7.45 million, if you count the pending loan to the water fund. Add to that the surplus $11.86 million in the sewer fund and the grand total of excess money collected on our sewer bills is $19.31 million.

19.31 million dollars. That is quite a slush fund. Remember, not everyone in Poway pays into the sewer fund. Many people are on septic. Several of the councilmembers (Higginson, Emery, Rexford) who approved the sewer fee structure and the recent sewer fee increases do not pay these fees because they are on septic systems. They do not share the honor of loaning money to the street fund or the water fund or the redevelopment agency or to the community facilities district 88-1 to pay off bonds to build the industrial park. Those on septic do not share the privilege of paying off the bonds for the new city hall to the same degree as those on the sewer do. (Both the water fund and sewer fund pay equally for the debt service on city hall).  Sewer fee increases will be on the agenda again in a few months.   I suggest we remind our council members of how very thankful we are for the honors and privilege of keeping the city afloat with our sewer fees.