TFTT Report

As Public Water Now tries to tout Montara, California as a successful government takeover of a privately-owned water system, here are a few important facts to keep in mind:

• Underestimated acquisition costs. Takeover advocates in Montara underestimated the acquisition cost by over 100%, claiming the takeover would cost $5 million when in reality it cost $11 million. In addition to the approximately $11 million acquisition cost, approximately $2 million from bond proceeds were used to pay the Montara Water and Sanitary District’s (MWSD) legal fees associated with the condemnation proceedings.
• Higher taxes. To finance the takeover, voters approved $17.5 million in 25-year general obligation bonds, to be paid back via a 24 percent increase in property taxes. Following the takeover, customers paid the same rates for their water, yet taxes increased dramatically for 25 years.
• False promises of lower rates. Just like in Felton, government ownership of the Montara water system has failed to deliver the rate benefits promised to customers. Contrary to earlier statements by the MWSD Board, the District did not lower water rates upon takeover, and in July 2003, MWSD voted to keep water rates at the levels established by Cal-Am. Condemnation proponents used pending Cal-Am rate increases to build support for a takeover. However, by 2008, the total financial burden (MWSD rates plus property taxes) on Montara ratepayers after the takeover was 17% higher than the rate increases Cal-Am had requested in its CPUC filings for that period.
• Decreased system investment. The Montara Sanitation District had to cut capital improvement funds and reserves to balance its budget in the years following the takeover.

California residents should get all of the facts on what has actually happened in Montara before taking Public Water Now’s word that a takeover is the right path forward. Learn more at TruthfromtheTap.com.