No change in special water tax – for now

The Castaic Lake spillway. Katharine Lotze/Signal

Local water users who pay for water delivered from Northern California through a special annual property tax levied by the Castaic Lake Water Agency, will likely see that rate go up in the next couple of years – but not this year.

Members of the agency’s Budget and Rates Committee voted Monday to recommend the agency keep the tax rate it has had in place this past fiscal year, with the understanding that the rate would likely have to be increased in the next couple of years, perhaps in fiscal year 2019/20.

The tax is based on a tiny fraction of an Santa Clarita Valley ratepayers property value, specifically, a little more than seven cents for every $100 of property assessed.

A local resident living in a home assessed to have a property value of $500,000, for example, would pay an annual tax of about $353 to Los Angeles County. The county would then give that tax-collected money to the CLWA.

The agency levies the special tax in order to pay for its cost of importing water to the Santa Clarita Valley from Northern California through an agreement called the State Water Project.

No change

The committee recommended Monday that the agency’s board of directors adopt a tax rate of 7.06 cents per $100 valuation for Los Angeles County and for Ventura Country since some agency customers live in Ventura County.

“It is recommended that the Agency maintain the tax rate of 7.06 cents per $100 assessed valuation – no change from fiscal year 2016/17,” Valerie Pryor, the agency’s assistant general manager wrote in her report to the committee.

The Castaic Lake Water Agency is a wholesaler that provides State Water Project water to four Santa Clarita Valley’s water retailers: Newhall County Water District, the Santa Clarita Water Division, the Valencia Water Company and the Los Angeles County Waterworks District #36.

About half the water used in Santa Clarita Valley homes and businesses comes from the CLWA. The rest is well water.

The CLWA pays the state’s Department of Water Resources for the Northern California water it gets, being one of 27 agencies contracted with the state to deliver water from the Sierra Nevadas.

The water wholesaler pays the DWR with the money it collects from SCV homeowners and businesses via the special property tax.

The State Water Contractors group is a non-profit association of 27 public water agencies – which includes the CLWA – collectively serving 26 million residents throughout the state.

In coming up with an appropriate tax rate to recommend to the board, water officials consider how much money it has in a fund set up to cover DWR Water Supply Contract payments.

Los Angeles County requires the agency provide the estimated tax rate by the first half of August of each year.

Based on estimated expenditures and revenues examined, agency staff this week recommended no change in the tax rate.

Fiscally conservative

“To be fiscally conservative and recognizing that State Water Project costs are increasing at a rapid rate, and to mitigate future tax rate increases as SWP costs continue to increase in the future, staff recommends no change in the tax rate at this time,” Pryor wrote in her report.

She added, however:  “Based on increasing SWP costs, even with increasing assessed valuations, it is likely that the tax rate will have to increase in the future, perhaps in FY 2019/20.”

Whatever the agency pays to the state for buying and distributing the water it gets from Northern California as a State Water Project contractor, is a cost shared among all property taxpayers.

“We haven’t had to change that rate in a while,” CLWA General Manger Matt Stone told The Signal last month. The tax rate has stayed the same since fiscal year 2010/11.

A third of the agency’s budget – 32 percent – is paid by SCV property owners by this special property tax set by the agency.

Castaic Lake Water Agency joined with Newhall County Water District to propose a single water agency for better water management in the Santa Clarita Valley – which would provide both wholesale and retail water operations.

Newhall County Water District originally battled CLWA over its stock acquisition of Valencia Water Company.

In December, the CLWA and NCWD signed a settlement agreement in December, calling on legislation to be drafted that would dissolve the existing water setup and create one new all-encompassing water district in the SCV.

SB 634 – the Santa Clarita Valley Water District Act – is the culmination of two years’ work by two feuding water districts to bury the hatchet and move forward.

The Senate approved SB 634 last week.


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