Posted by: Deirdre Des Jardins | April 22, 2016

Controversy erupts over Santa Clara Water District’s groundwater charges

 

A controversy erupted this week over Santa Clara Valley Water District’s Fiscal Year 2017 forecast of residential and municipal (M&I) groundwater charges. On April 19, Restore the Delta strongly criticized the District for including the WaterFix / Delta tunnels costs in the projected charges, and questioned the District’s forecasts of impacts on cities and residential well users. The District issued its own strong rebuttal on April 20. But the District’s rebuttal raises more questions than it answers.

Groundwater charges are rapidly increasing

The District’s 10 year forecasts of groundwater charges have increased dramatically in recent years. This forecast is from January 13, 2015:

And this forecast is from April 12, 2016:


As the table below shows, between January 2015 and April 2016, there was an increase of 34% in projected out year charges for North County, and 11% in South County.

SCVWD forecast groundwater charges – 2025

 

 Jan 2015   

April 2016

% increase 

North County    

$1695                  

$2332                  

34% 

South County    

$519                    

$604                    

11% 

The main cause of the increase appears to be low “placeholder” cost estimates for the water recycling program in the FY 2016 budget. The estimates for this program went from a $123.9 million placeholder in January 2015, to $924.1 million in April 2016.

Are estimates of the WaterFix impacts on groundwater charges too low?

Restore the Delta expressed strong concerns that the costs used for the California WaterFix in the FY 2017 budget are also too low — “ridiculously rosy.” The District has strongly disputed this. The table below shows the difference between the WaterFix groundwater charges used in the FY 2017 forecast (April 13, 2016 Agenda, p. 52) and the groundwater charges in the WaterFix High Cost Scenario from presented to the County Water Commission as part of the “Business Case.” (April 13, 2016 Agenda, p. 85.)

WaterFix – SCVWD forecast groundwater charges

 

FY 2017 

High Cost Scenario 

North County 

$75 

$316 

South County 

$38 

$229 

Using the numbers from the Business case for the WaterFix, one can estimate the following maximum total groundwater charges by 2026. The current and previous fiscal years are included for comparison.

SCVWD M&I Groundwater charges

 

FY 2015

FY 2016

2026 (FY 2017 forecast)

2026 (w/ High WaterFix costs)

North County

$747 / af 

$894 / af 

$2332 / af 

$2648 / af 

South County 

$319 / af 

$356 / af 

$604 / af 

$795 / af 

These estimates show that under the High Cost Scenario, the total groundwater charges for the South County could rise to 2.5 times the FY 2015 costs. The North County charges could rise to 3.5 times the FY 2015 costs. Between 2016 and 2026, the South County Costs could double, and the North County costs could almost triple.

District’s internal forecasts for the High Cost scenario

After Restore the Delta released estimates of the potential increases in groundwater charges under the WaterFix High Cost Scenario, the District staff pointed out that the estimates are somewhat high, because the WaterFix Business Case uses cost projections for 2029 rather than 2026. The staff released an internal forecast for the 2026 groundwater charges under the WaterFix High Cost Scenario.

SCVWD forecast M&I Groundwater charges — 2026

 

FY 2017 forecast

w/ High WaterFix

costs 

Difference

North County 

$2,332 / af

$2,510 / af

7.6% 

South County 

$604 / af 

$754 / af 

25 % 

Under the District’s projections for the High Cost Scenario, the 2026 South County M&I groundwater charges would increase by 2.4 times over FY 2015, while the North County charges would increase by 3.4 times. Between the current fiscal year (2016) and 2026, the South County charges would double, and the North Country charges would almost triple. The District has yet to release the full internal groundwater charge forecasts for the High Cost Scenario.

The District’s FY 2017 budget also discloses $124.9 million in unfunded capital projects, including seismic retrofits at two dams. The April 2016 presentation notes that water rates will need to increase to pay for them.

 


Responses

  1. […] For more information about the controversy erupting over the Santa Clara Valley Water Districts's groundwater charges, go to: https://cah2oresearch.com/2016/04/22/controversy-erupts-over-santa-clara-water-districts-groundwater… […]

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