BACKGROUND
Water Tax:
AB 217 (Eduardo Garcia) Safe and Affordable Drinking Water Fund (Oppose Unless Amended)
As amended on May 21, 2019, this measure would impose a monthly fifty cent ($0.50) “system charge” per service connection on all public water systems as of July 1, 2020. As proposed, the Safe and Affordable Drinking Water “system charge” is still a tax under the California Constitution. [See Article XIII A.] Additionally, AB 217 expands the scope of assistance beyond the water systems previously identified by the SWRCB and is attempting to use public funds to address private wells and systems.
Staff Comment: As an integrated-utility, our goal is to provide high-quality, reliable and low cost utility services. Staff has estimated the annual “system charge” that EU would have to submit to the SWRCB to be approximately $257,000. Per proposition 218, this cost would have to be passed on to our customers. This new “system charge” would not be used to benefit our customers. In fact, this “system charge” will impact our ability to continue to meet the needs of customers in a cost effective manner. Ultimately, this “system charge” will have the greatest impact on the affordability of water on our lower income customers.
SB 200 (Bill Monning) Safe and Affordable Drinking Fund (Watch)
As amended on May 7, 2019, SB 200 would create the Safe and Affordable Drinking Water Fund in the State Treasury. Additionally, the measure would set up the framework for the expenditure of the funds for fund grants, loans, contracts, or services to assist eligible recipients in delivering safe and affordable drinking water to Californians.
Senator Monning was the author of the water tax legislation last year (SB 623). Governor Newsom modeled his Budget Trailer Bill upon SB 623 from last year. As amended May 7, 2019 the bill currently focuses on implementing the Safe and Affordable Drinking Water fund.
SB 414 (Anna Caballero) Small System Water Authority Act of 2019 (Support)
The bill would establish criteria for the consolidation of water systems not meeting drinking water standards. Many of these systems lack the technical, managerial and financial abilities to deliver safe water. Consolidating these water systems that cannot consistently meet state and federal drinking water standards, will help to prevent the need to provide ongoing financial support to prop up these failing systems.
Staff Comment: SB 414 made it out of its first two policy committees on unanimous votes and was placed on the Appropriations Suspense File and is expected to be taken up again on May 16th. We anticipate this measure moving forward as part of the discussion to provide a comprehensive solution to assure all Californians have access to safe and clean water. SB 414 provides an alternative method of consolidation. In return these new systems will have the benefit of a larger service (economies of scale) and access to funding they previously were unable to access. Roseville supports this legislation as it helps to provide a long-term solution to provide safe drinking water to thousands of Californians, in addition to reducing the overall funding needed through the proposed statewide water tax.
SB 669 (Caballero) Safe Drinking Water Trust (Support)
The purpose of the Trust proposed in SB 669 would be to provide a durable funding source to help community water systems in disadvantaged communities provide their customers with access to safe drinking water. This is an alternative policy proposal to the various bills proposing a State Water Tax. The Trust would be funded using one-time funding during budget surplus years. As well, the Trust would also be able to receive funding from other sources like the federal government, non-profits and other donations.
Staff Comment: SB 669 made it out of its first committee on a 7-1 vote and was up in Senate Appropriations Committee on May 13th where it was placed on the suspense file. Due to an alternative proposal, by Senate Pro-Tempore Tony Adkins, SB 669 is expected to be held in the Appropriations Committee. The Senate proposal, which was advanced during a recent Budget Hearing, continuously appropriates $150 million from internet sales tax to deliver safe drinking water. The new Senate proposal and the Trust alternative are preferred over placing a water tax on our customers’ bills. As the Governor’s water tax would cost our customers approximately $580,000 annually. The potential annual administrative costs to EU have been estimated to potentially exceed $100,000 annually. This includes changes to our utility billing system and also staff time. As currently proposed, Roseville would have to pass on $80,000-$90,000 annually to our rate payers to cover our administrative costs.
Attachment A: Current list of legislation being tracked by the Environmental Utilities Department, by position.