Reality check

Many Claremont residents recently received flyers against Measure W under the title “Local Professors” with two quotes. One was from Rodney Smith, which simply repeats a dollar claim regarding costs that I have already made clear in a previous article is totally false and misleading.

The new element is a quote from a Pomona College politics professor,which states, “it would function like anew tax. Most unfairly, if all water users are assessed equally for that debt, the rates of the smallest and most careful users would rise by 200 percent or more.” I am simply astounded by this statement for a number of reasons.

No one, not members of Claremont’s City Council nor anyone associated with FLOW has ever suggested that any surcharge would be apportioned in the way this politics professor is suggesting.The rates and the way any possible surcharge associated with the cost of buying the water system would be apportioned would be decided by our city council after public hearings and consultations with Claremont residents.The suggestion made in the above quote is a fantasy that has no basis in reality whatsoever.

Here is what would actually happen:If the cost determined by the court (with or without a jury) is under $80 million there would be no increase in water rates at all. The extra revenue that Golden State now collects with the current rates would produce a surplus of some $8.4 million over the actual cost the city would bear to supply the water.This sum would be sufficient to service about $80 million in revenue bonds. (See my earlier article and the more complete analysis available on the FLOW website for details.) So, in the event that the price is under $80 million, the city would not have to raise rates at all, and could even lower them if the cost were closer to the $55 million appraisal. If the cost set by the court is above $80 million, the surcharge (which is not a tax, despite all the Golden State and Rodney Smith statements to the contrary) to water users would be on a per-cubic-foot-of-water-used basis—not on a per-user basis.

Small users would pay far less and heavy users more—exactly the opposite of what this politics professor suggests would happen. Moreover, unlike a property tax, the water surcharge would apply to all users of water, even those who do not pay property taxes, such as churches and the Colleges. So this cost would be spread much more widely and fairly,and hence result in a lower per-cubic-foot rate.People who save water would be re-warded, not punished as is suggested in the quote.

Moreover, the figure in the quote of 200 percent has no basis in reality whatsoever. Even if the very worst case occurred and the court set a price of $135 million, which is highly unlikely,the average residential user would pay only about $27 per month more on a current average cost of $138 per month.That means the average user would see a temporary increase of 19.6 percent—nowhere near the figure of 200 per cent claimed in the quote. The users of less water would pay in proportion to the water they actually use and hence the percentage increase,if indeed there is any, would also be 19.6 percent. Citing this 200 percent figure is just a continuation of the falsely-based scare tactics Golden State Water, Rodney Smith, and now this politics professor, insist on using.The point is that both statements by these professors in this mailing are completely false and misleading.

Andy Winnick, PhD in Economics
Professor of economics and statistics
California State University, Los Angeles
Claremont resident since 1996