• Lower interest rates make public water more affordable

    The small town of Felton, an unincorporated area in Santa Cruz County, saw their original water purveyor, Citizens Utilities, purchased by Cal Am a decade or so ago. A public outcry and a campaign led by a citizens’ group calling itself F.L.O.W. (Friends  of Locally Owned Water) resulted in an $11 million bond measure, passed by Felton voters in 2005, to puchase the water rights to the town and take it away from Cal Am.  San Lorenzo Valley Water district now manages the water for the towns in the San Lorenzo Valley.

    In October, 2012, Santa Cruz County Supervisor Mark Stone, who was part of the original campaign, called for the county to refinance the bond, which has $9.5 million outstanding, noting that rates had fallen from the original 5.1 percent to 3.4 percent. And on Oct. 30, they voted to do so.

    The result is that Felton residents will see a decrease in their property tax rates next year of about $60 per parcel, or a little less than $500.

    “That’s about right,” said Ron Weitzman of Water Plus, speaking of the 3.1 percent interest rate on the bond. It’s an interest rate that is not available to companies such as Cal Am, but would be available should water be publicly owned.

    “Right now, we’re paying about 6.48 percent through our water rates,” he said, noting that Cal Am has about $67 million in debt compared to what is estimated at $27 million in equity.

    Weitzman, president of the citizens’ action group Water Plus, believes that the equity could be purchased from shareholders and the debt assumed. Part of that debt is the $49 million in cost to remove San Clemente Dam. Instead of calling it a liability, the California Public Utilities commission voted to call it a “capital improvement” and allow Cal Am to make a profit on it.

    Weitzman said that former Pacific Grove Mayor Carmelita Garcia has gone to work for Water Plus on a part-time, volunteer basis as an executive director. Her goal, he said, is to run Water Plus “similarly to the way” LandWatch, a Monterey County land-use watchdog, is run.

    The entry of Donald Lew and his private equity firm on the scene (see related story) could mean that Lew will want to sell the Marina desalination project, in which case a public entity could buy it at the lower 3.4 percent interest rate. Weitzman said he is “not against” the possibility.

     

    posted to Cedar Street Times on December 30, 2012

    Topics: Marge Ann Jameson, Water

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