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CORRECTION: Another Water District (Not) Charging Property Taxes for Delta Tunnels Planning: Zone 7 Water Agency

UPDATE July 14, 2016: We met with the Zone 7 Water Agency Finance Committee today. Their staff misunderstood our PRA request and did not provide all the documents we had initially requested. They provided more information today that shows that they did NOT use property taxes to pay for tunnels planning. They apologized for their misunderstanding, and we in turn said that we would let people know that they had not used property taxes. Our intent is to keep the public fully informed with correct information.

For Release: 7/7/16
Barbara Barrigan-Parrilla, Restore the Delta, 209-479-2053, [email protected]
Brian Smith, 415-320-9383, [email protected]

Another Water District Charging Property Taxes
for Delta Tunnels Planning: Zone 7 Water Agency

Stockton, CA – Documents released under the California Public Records Act reveal that the Zone 7 Water Agency of Alameda County has been using property taxes to pay for Delta Tunnels (BDCP/CA WaterFix) planning costs before even one shovel of dirt has been turned. Taxpayers never had a vote on these taxes.

Fees for the tunnels were to come from water ratepayers not property taxes. California Department of Water Resources, Metropolitan Water District of Southern California, Santa Clara Valley Water District, and Zone 7 officials have said for years in public that the tunnels would cost just $5 a month for urban water users. These taxes were buried deep in agency records in at least two water districts.

“The public is unaware that their property taxes are being used to pay for the planning of a project that will have negative impacts on the San Francisco Bay-Delta estuary,” said Barbara Barrigan-Parrilla, executive director of Restore the Delta. “Property taxpayers in Zone 7 never had a vote on the matter, and the district has not discussed this funding in any broad manner to facilitate public understanding.”

This June, a PRA request revealed a similar Delta Tunnels funding scheme by the Santa Clara Valley Water District in June and resulted in public outcry over funding the Delta Tunnels with property taxes.

“We are seeing a similar shell game being used to fund Delta Tunnels planning in water districts across the state,” said Barrigan-Parrilla.

In letters to both Zone 7 and Santa Clara Valley Water District in March of this year, the Howard Jarvis Taxpayers Association said urban water districts could face lawsuits over these property taxes for the project because the Delta Tunnels were not part of the 1960 act that launched the State Water Project. In fact, a similar proposal, the Peripheral Canal, was rejected by Californians in 1983. To be legal, any new fees for the Delta Tunnels must be approved by a two-thirds vote of taxpayers under Proposition 13.

However, Zone 7 collected these property taxes to pay for their share of the State Water Project. About 1/12th of what has been paid to the State Water Project from 2008 to 2013 has been used to pay for Delta Tunnels planning for a total $2,473,768. An estimated additional $259,751 was paid in 2014.

“If Zone 7 could not undertake Delta tunnels planning without tapping into property taxes, how will it pay for its share of a $15 billion project (before cost overruns) relying only on a $5 month increase to water bills?” asked Barrigan-Parrilla.

Analysis of the Zone 7 PRA Documents
The original PRA request for the Zone 7 Water Agency was intended to investigate the sources of funds Zone 7 is using to pay the DWR for its BDCP Program. According to the DWR Statement of Charges, from 2008 through 2013, Zone 7 paid $2,473,768 to the DWR for BDCP usage. The breakdown of charges expressed in the Statement of Charges (SOC), is as follows:

Year Charges ($)
2008 67,764
2009 551,820
2010 672,854
2011 102,180
2012 474,826
2013 604,324
Total 2,473,768

A footnote to this table in the original attachment in the statement of charges states that for years 2012 and forward “total BDCP-DHCCP charges are included as a line item in a letter from DWR and invoiced 1/12 per month as part of the Minimum Transportation Charge.” According to the State of Charges for funds due in 2014, the annual transportation charge will be $3,117,017. 1/12 of the total value of this comes to $259,751 (see Attachment A1), and this should be treated as the 2014 BDCP contribution value.

According to Zone 7’s Budget and Comprehensive Annual Financial Report for 2015-2016, all funds sent to the DWR for State Water Project charges come from Fund 110 (State Water Facilities). Fund 110 is primarily paid for by property taxes – see page 3-6 of the 2015-2016 budget. Approximately 84.5% of this fund is paid for in property taxes:

It is clear that Zone 7 uses property taxes, water sales and “other revenue” to pay for its BDCP contributions to the DWR.

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{ 3 comments… add one }
  • David Ogden
    July 7, 2016, 10:31 pm

    THERE IS ONLY SO MUCH WATER COLLECTED NOW SO WHY DON’T WE INVEST IN MORE COLLECTION INSTEAD OF DRAINING THE LIMITED AMOUNTS THAT EXIST!!

  • Sarah Palmer, Ph.D.
    July 8, 2016, 1:13 am

    Unfortunately you seem to have misinterpreted your findings. Zone 7 used water rates to pay its share, NOT property taxes.
    Sincerely,
    Sarah Palmer
    Zone 7 Board of Directors

    • July 8, 2016, 5:24 pm

      According to Zone 7’s Budget and Comprehensive Annual Financial Report (CAFR) for 2015-2016, all funds sent to the DWR for State Water Project charges come from Fund 110 (State Water Facilities). Fund 110 is primarily paid for by property taxes – see page 3-6 of the 2015-2016 budget. Approximately 84.5% of this fund is paid for in property taxes:Based off of this evidence, it is a fair statement that Zone 7 uses property taxes, but also watersales and “other revenue” to pay for its BDCP contributions to the DWR.
      And here is the link to their report: http://restorethedelta.org/wp-content/uploads/2016/07/Z7-2015-CAFR-2.pdf