Paso’s costly water project just a backdoor tax?
August 31, 2008
By DANIEL BLACKBURN
A multi-million-dollar Paso Robles water project funded by fattened water rates has pitted two mayoral candidates against one another and the conflict’s outcome could impact North County development for years to come.
City officials have decided to saddle water users with sharp rate hikes to pay for the Nacimiento Pipeline water delivery system, which includes a $100 million-plus water treatment plant to deal with the lake water’s high mercury content. A price tag to the pipeline of $76 million is alleged, but debt service and other costs may eventually hike the total project cost to more than $300 million.
The city council’s tentative endorsement of higher water rates for capital construction of the project sparked an outcry from thousands of dissenters who already have signed petitions to stop what they call a new tax assessment.
The council meets Tuesday, and may postpone its anticipated final vote on the rate hike, according to sources.
Project advocates argue that the pipeline and treatment plant are necessary because “the city needs to improve and diversify its water supply or the demand may soon exceed the supply.”
In supportive literature paid for by city residents, advocates note that “the city is already contracted and committed to this project. The water rate increase is a must to pay for an alternative, better quality and additional water supply; to maintain the existing water delivery system in good working order; and to replace aging pumps and other equipment.”
The plan will “relieve stress on the groundwater basin” and provide an “independent” source of supply for North County residents, its proponents argue.
In fact, the current condition of the underground basin is emerging as an issue of major contention. When Paso Robles’ city council in the late 1990s moved politically to a pro-growth position after years of a relatively steady population base, a significant spurt in housing and commercial construction followed. That put additional pressure on the city’s wells, but that growth was nearly insignificant alongside the massive uses by an influx of huge corporate wineries on the city’s east side.
Opponents of the water rate hike contend that current residents are being unlawfully forced to pick up the capital costs of a project which will primarily benefit agriculture and new population growth.
Paso Robles is the first stop for water traveling through the yet-to-be-built Nacimiento Pipeline, and the city’s participation was key to the project’s future ability to deliver supplies to the South County. Nevertheless, a growing element now believes the plan stole into the consciousness of Paso Robles’ residents like a thief in the night, following a circuitous route to approval virtually guaranteeing limited public involvement in the process and offering little opportunity for questions.
The growing conflict centers on an important constitutional issue.
Under California law, policy makers cannot simply levy an assessment or tax on real property to pay the capital cost of new public improvements or services. Such issues must be placed before the electorate for approval by a two-thirds vote. This statutory prohibition has caused a lot of grief for public officials anxious to fund and construct capital improvements, and much thought has been expended crafting methods to find ways to circumvent the law — and sometimes the will of the people.
John Borst, a 13-year resident and college instructor, and city council member Gary Nemeth, are both seeking the mayor’s post in November, and both have strong opinions on the water project’s fate. Borst believes the burgeoning water rates are just a tax in disguise. Nemeth is an unabashed advocate of the pipeline’s construction. (Two other candidates for mayor, Jim Norman and Duane Picanco, have so far remained in the water battle’s background, although Picanco has always supported the Nacimiento Pipeline and its related infrastructure with his votes on council.)
Borst is a member of a group formed to fight the new rates called Concerned Citizens for Paso Robles (CCPR).
City officials acknowledge they slipped the project in between cracks in state law. And although city officials claim that residents have had ample occasion to express their opinion, a growing number of people are now saying otherwise.
In order to patch some large holes in California’s revolutionary Prop. 13, the Howard Jarvis property tax limitation constitutional amendment, voters in 1996 approved a fix-it plan called Prop. 218. But during a brief window during which legal challenges to Prop. 218 were being batted around in various courts and were momentarily unsettled, officials in the city of Paso Robles nursed the Nacimiento Pipeline into existence.
City Manager Jim App, who has positioned himself as the city’s primary paid advocate of the water project, said he thinks officials have followed the law, and argues that the issue is not one that should be decided by voters.
“The actions of the city council current and past are entirely consistent with their duty and voter-vested authority. Further, capital project decisions are not subject to Proposition 218 provisions,” he wrote on the city’s water Web site.
App argues that Paso Robles’ “primary and best use of water” is for agricultural use. Many residential users think the cost of new water development should be borne by new development and vintners.
The argument eventually gets around to a definition of the word “assessment.”
An “assessment,” according to wording of the voter-approved Prop. 218, “means any levy or charge by an agency upon real property that is based upon the special benefit conferred upon the real property by a public improvement or service, that is imposed to pay the capital cost of the public improvement, the maintenance and operation expenses of the public improvement, or the cost of the service provided.”
“The provisions of Prop. 218 are very applicable here. It requires voter approval of many methods of public revenue raising,” said Tom Rusch, another member of CCPR. He appeared last week with Borst and Karen Reed on KPRL radio’s Dick Mason show.
The law “does not allow local officials to change fees to meet revenue needs. It shifts most of the power of taxation from local governing elected boards – such as a city council – to residents and property owners,” Roush said. “The purpose is to ensure that property assessments are approved by voters.”