Politics & Government

Residents Demand Water Bill Refunds

The San Juan Capistrano City Council received reports from staffers Tuesday on the city's financial situation.

Because it won't be issuing $18 million in bonds as planned, the city will delay $5.4 million in work needed to improve recycled water and sewer infrastructure.

The move riled a few residents, who complained at Tuesday's City Council meeting that the planned bond issue was used, in part, to justify water rate hikes in February 2010.

"The city has collected $1.66 million from the water rate payers for a bond sale that has not, or may never be issued," said resident John Perry, who is also a member of the city's. "Under Proposition 218, this service has not been delivered, and therefore, the $1.66 million must be refunded to the rate payers and the water rates reduced by $1.3 million per year."

Find out what's happening in San Juan Capistranowith free, real-time updates from Patch.

City Attorney Omar Sandoval said he will look into Perry and others' contention that the city owes residents refunds. He said, however, that the water rates were never raised as a surcharge to pay for the bonds specifically. Plus, he said, the higher rates are also used to cover the costs of paying off other debt and to import water.

San Juan Capistrano is unusual in that it operates its own groundwater recovery plant to pump, treat and deliver water to its residents. In November 2008, the city took over the day-to-day operations and maintenance of its Groundwater Recovery Plant from SouthWest Water Co., which had operated the plant under contract with the city since its construction in 2004.

Find out what's happening in San Juan Capistranowith free, real-time updates from Patch.

City Councilwoman Laura Freese said that while operating the plant, the city has encountered numerous, unexpected setbacks, such as having to replace deteriorated metal casings in five wells that feed into the plant. She told San Juan's chief financial officer, Cindy Russell, that she fears another setback could be around the corner at a time .

"What happens if something else happens? How are we going to pay for it?" she asked Russell, who responded, "I don't know. ... We’re looking forward to July 15."

July 15 is the date that West Curry, assistant utilities director, said he expects the plant to run at full capacity .

In addition to delaying the recycled water and sewer capital improvement projects, the City Council affirmed Tuesday a recommendation from the Utilities Commission to slash $6.5 million in funding for water-related projects, such as for an emergency standby electric generator.

The city's water budgets have an $8.2-million deficit.

Russell said the need to slash funding for the water projects is the result of pumping less water than staffers originally anticipated when they drafted the year's budget. Low-production issues are compounded by water sales to residents being at their lowest point in 15 to 20 years.

Russell explained Tuesday, however, that the department has only lost about $1 million this fiscal year; the remaining $7 million in red ink has accumulated during the past several years.

City officials had projected producing 4,800 acre-feet of water this year but recently revised that estimate to 1,800 acre-feet. The low production has meant the city lost out on $750,000 from the Metropolitan Water District, the water agency from which it imports water. The city's agreement with MWD says San Juan will receive a grant of $250 per acre-foot of water produced from its groundwater recovery plant.

"Since we revised our estimate down to 1,800 acre-feet for this year, the new grant total is $450,000, or a reduction of $750,000," said Russell.


Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.

We’ve removed the ability to reply as we work to make improvements. Learn more here