The following is a story on municipalization from the current issue of Caltaxletter.

SANTA CRUZ SUPERVISORS VOTE TO HOLD ELECTION ON WATERWORKS BUYOUT

Santa Cruz County supervisors on August 3 voted to hold an election on whether to create a special taxing district to buy out the Felton waterworks from its corporate owner, California American.

The 4-0 decision, according to the Santa Cruz Sentinel (August 5), will cost taxpayers up to $50,000 to prepare for an election. County supervisors have to prepare a schedule of tax rates before the vote. Two-thirds of voters must support a Mello-Roos bond to fund the takeover. The county’s cost would pay for a bond counsel and advice on forming the district.

"According to proponents of the takeover, if voters approve a Mello-Roos bond, they will have to pay between $600 to $1,200 in added property tax for the next 30 years." Additionally, there will be a loss of $75,000 in property tax now paid by the company to local governments. The Mello-Roos bond will become a lien on the property and a deterrent to property sales.

Cal-Tax Vice President Carol Evans advised against the purchase in comments at a community meeting. She gave a statewide perspective of municipalization efforts and said the winners are usually attorneys and consultants and the losers are usually taxpayers.

Supervisor Jan Beautz acknowledged that there would be “some risk” involved, but said it was worth taking because “water shouldn’t be in the hands of a private company.”

A Felton resident, Adeline Davis, said she was worried the acquisition costs through eminent domain would be too high, the Sentinel reported.

The paper said about 15 speakers were members of Friends of Locally Owned Water, which had collected 1,305 signatures of people in favor of the buyout. Elections officials said 77.8 percent were verifiable ratepayers.

Opposing the buyout, besides representatives of the company, were four members of the San Lorenzo Valley Property Owners Association. Paul Storm, a candidate for the San Lorenzo Valley Water District Board, was neutral on the Felton buyout. However, he said the ratepayers, not the county, should be responsible for the $50,000 in pre-election expenses, the Sentinel reported. 

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