Problems with Measure U
Measure U is rife with problems. Ironically, the first is that Measure U may strike many voters as superficially appealing. Many valley residents are understandably upset that their water bills have increased dramatically over the past decade, and low-income ratepayers have legitimate concerns about their ability to pay. However, the fact that Measure U purports to address these issues does not mean that it does so effectively. In addition, some of the arguments being made by proponents of Measure U are either false or highly misleading. Unfortunately, voters have no easy way to recognize this deceptive advertising as it virally propagates through our community.
What voters really need are honest answers to the following two crucial questions: (1) what consequences will Measure U have for ratepayers? (2) what consequences will Measure U have for SLVWD and our community?
Impact on Ratepayers
The consequences of Measure U for ratepayers are more complicated than they may initially appear. If Measure U passes, ratepayers will see a sharp reduction in their monthly “fixed” rate on their water bill. Beginning in January of 2025, ratepayers will experience a monthly savings of $21.17. This is because Measure U would limit the annual increase in the basic “Service Charge,” repeal the newly imposed “Capital Charge,” and eliminate the remaining years of the five-year “Fire Surcharge.”
However, this $21.17 monthly savings will be temporary. SLVWD will be forced to develop a new rate structure as soon as possible, and this new rate structure will either have to generate the same total revenue as the current rate structure or else further impair the District’s ability to operate. In addition, the new rate structure will need to recover the lost revenue from Measure U. The result is that non-fixed, consumption-dependent “water rates” will increase for everyone, and – due to the 2% annual cap on fixed-rate increases – these rates will need to increase even more so over time. Consequently, much of the ratepayer savings promised by Measure U will prove to be purely illusory.
Additionally, our local school district is one of the largest water users in the valley (6.6 million gallons last year). The current rate structure classifies the school district as an industrial user, exempting it from the tiered rates and charging it only modest increases for the five-year period. If Measure U is enacted, any new rate increases will have to rely primarily on volume-based charges. Even a small increase in the industrial water rate will cause he school district’s bills to skyrocket.
Impact on SLVWD
The consequences of Measure U for SLVWD and the community are alarming. The District estimated that it may incur unanticipated costs of around $300,000 simply due to Measure U being on the ballot. If Measure U is enacted, it will likely take SLVWD at least half of 2025 and an estimated $100,000 to establish a new rate structure. The resulting $170,000 per month shortfall in revenue will translate into further delays in infrastructure improvements and further challenges in staffing. In the worst case, it will severely impair SLVWD’s ability to respond to upcoming winter storm damage and other emergencies.
Even more problematic is Measure U’s long-term 2% cap on annual fixed-charge increases. The measure does not change the revenue needed to run the District, and this amount is almost certain to increase far faster than 2% per year. Arbitrarily limiting increases in the fixed rate will force SLVWD to become more and more dependent on volume rates.
Water use varies a lot from month to month and year to year. For example, people use much more water in hot, dry weather. But the actual costs to operate the District do not change much because they are fixed. Therefore, Measure U will lead to unpredictable water use raising unpredictable revenue. This not only means that the District be unable to effectively plan and manage their budget but also that the overall rates will need to increase to maintain an adequate financial reserve.
Lastly, independent of revenue issues, Measure U proponents claim that it will promote conservation by forcing the District to adopt higher volume-dependent “water rates.” However, if homes are using relatively small amounts of water, the opportunity for conservation is limited. Conservation is achieved by charging higher rates for high volume users, and the current rate structure does precisely this. The lower rates for the first tier do not contradict the overall conservation goals; they simply provide a partial offset to the higher fixed charge.
The bottom line is that, if enacted, Measure U will significantly undermine the operation and resilience of our water district at a time when the District already faces serious challenges. From this perspective, Measure U, can become the antithesis of a positive, pro-ratepayer intervention – it threatens our entire community by superseding the decisions of our elected representatives with the disruptive meddling of a group of poorly informed citizens.
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