Property Taxes Help Keep Irvine Ranch Water District Rates Low
The Orange County Register recently posted an article based on the Orange County Grand Jury April 2012 report that suggests that public agencies such as the Irvine Ranch Water District should raise customer rates by forgoing use of local one percent property taxes. We thought we would take this opportunity to explain to our customers how these property taxes help keep your water rates among the lowest in Orange County.
IRWD finances the facilities it needs in order to provide water and sewer service to our customers by issuing general obligation bonds, much like you finance your home with a mortgage from the bank. IRWD uses the one percent property taxes received from the state, along with other local property taxes and new connection fee revenue, to make payments on these bonds. This makes sense - property owners directly benefit from the water and wastewater infrastructure and services their property taxes have paid for.
Bonds issued by IRWD are typically used to fund basic water and wastewater infrastructure – which includes projects like reservoirs, groundwater wells, water pipelines, water pump stations, sewage lift stations, sewage treatment and disposal capacity, and sewage collection pipelines. This enormous infrastructure serves about one fifth of Orange County and includes more than 1,100 miles of drinking water pipelines, more than 400 miles of recycled water pipelines, more than 900 miles of sewer pipes, 53 reservoirs, and two large wastewater treatment plants.
In fiscal years 2004-05 and 2005-06, the state grabbed a total of $19.4 million of the District's one percent property tax allocation in a budget-balancing maneuver. The “temporary” taking of that property tax revenue directly resulted in an increase in new service connection fees and local property taxes. Years later, the state still owes IRWD customers $2 million—and the state budget is still a portrait of fiscal chaos.
The Orange County Grand Jury clearly and strongly suggests it would be the responsible thing to do for the state to once again hijack property tax revenue from special districts. As we have illustrated, that would be the opposite of prudent, responsible policy. Such a shift, whether temporary or permanent, would once again result in connection fee and local property tax increases. A permanent redirection of that tax revenue into state coffers could well lead to increased monthly user rates.
Even when the state takes property tax funds away from local agencies such as IRWD, our customers still continue to pay the same one percent property taxes to the state plus any additional IRWD imposed taxes and fees necessary to pay our infrastructure bond payments. In the end, this is a roundabout way for the state to quietly raise taxes by forcing IRWD to increase fees and assessments to offset the property tax revenues taken by the state.
Lastly, when IRWD or other local districts use property taxes, taxes are used locally under the watchful eyes of our customers. On the other hand, when the state takes local property taxes the money goes to the state to be spent on programs far removed from local oversight.
IRWD supports transparency and posts a variety of financial documents online, including the IRWD annual Comprehensive Financial Report and the Operating and Capital budgets. To learn more about IRWD finances, please visit the finance section of the IRWD website.
Orange County Grand Jury Report Mischaracterizes IRWD Financial Planning
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The comment by the Orange County Grand Jury in the April 27, 2012, report on Special Districts characterizing the Irvine Ranch Water District “Cash and Investments” as unrestricted is misleading. The Orange County Grand Jury states that that IRWD’s “Cash and Investments” of $225 million can be considered unrestricted reserves and then provides no basis for this assertion. This contradicts IRWD’s audited financial statements which reflect no unrestricted water or sewer assets.
Correctly stated, IRWD "Cash and Investments" of approximately $250 million consists primarily of funds that are restricted to pay for infrastructure replacement and refurbishment needs of the District over time as well as restricted proceeds from bond issue to finance capital infrastructure (See note 2 in the Statement of Net Assets in the IRWD 2010 Comprehensive Annual Financial Report.)
IRWD provides water, sewer, recycled water and urban runoff services to more than 300,000 residents and numerous major employment centers, almost one fifth of the County. The District’s infrastructure that includes more than 1,100 miles of drinking water pipelines, more than 400 miles of recycled water pipelines, more than 900 miles of sewer pipes, 53 reservoirs, and two large wastewater treatment plants. Every year IRWD evaluates its future replacement and refurbishment funding needs utilizing sophisticated planning models that currently indicate that IRWD will require an estimated $2 billion in infrastructure and refurbishment funding in the future.
Not unlike saving many years in advance to fund a child's college education, IRWD believes that setting aside funds now to fund future infrastructure expenditures is prudent financial management so our customer's rates are not severely impacted by large capital expenditures in the future. This approach to financing future infrastructure needs is described on page 8 of the IRWD 2010 Comprehensive Annual Financial Report.
IRWD residential and business customers benefit from modern water and sewer infrastructure and among the lowest rates in Orange County. This did not happen by accident. It is the result of careful and prudent fiscal planning over many years. Our goal is to always provide customers with low, stable rates, a diverse and highly reliable water supply, and excellent service. For more information please visit www.irwd.com.
Take Control of Your Controller – Step 2
Part two of taking control of your irrigation controller focuses on the importance of what is being watered and where to optimize efficiency.
“Sketch out a map of your landscaped area and label the different watering zones in your yard,” advises Nathan Adams, IRWD Water Efficiency Analyst.
- Identify each watering zone or station by manually turning on the water to each group of sprinklers.
- Make note of how many zones/stations you have on your map and how many you have on your controller.
- Ideally, shrub and turf areas should be watered in separate zones because they have different watering needs. Mixed zones lead to inefficient watering.
- Most controllers have more than one program (i.e., A, But, Construct). Use multiple programs to differentiate between turf and shrub zones, since their watering needs are different.
- Next month, we will explain Step 3, which is how to use multiple programs and multiple start times to increase water use efficiency and reduce runoff.
For more information, please visit www.alwayswatersmart.com and click on irrigation schedule.
Contact: Shannon Reed, Public Affairs Manager
reeds@irwd.com, (949) 453-5500
Irvine Ranch Water District Storage Reservoirs Meet Customers’ Needs
There are 36 “water workers” at Irvine Ranch Water District on the job 365 days a year without rest. They are not easily seen, but are there nonetheless, providing drinking water for customers, in addition to fire flow protection. They are the 36 potable water reservoirs dotted throughout the IRWD service area.
“Elevation is the key,” said IRWD Water Operations Manager Tom Roberts. “Because of their elevation, reservoirs provide water pressure for the system and a reserve supply in case of a power outage or other emergencies. Additionally, tank reservoirs provide adequate flow for fire fighting.”
IRWD reservoirs are designed to be non-intrusive and blend into their surroundings. They can be constructed of steel or concrete and take many shapes. Most reservoirs in the IRWD service area are round tanks and many are even built partially submerged with only a few feet exposed above ground. One concrete reservoir in Shady Canyon is rectangular because of the shape of the property where it was built. It’s also painted green to blend into the hillside. A reservoir in Newport Coast is completely buried and not visible at all.
Two other reservoirs in the Foothill Ranch area are painted an earth tone that blends into the hillsides. The largest two IRWD reservoirs each hold 16 million gallons of water. They are buried concrete structures located at the Baker Water Treatment Plant in Lake Forest. IRWD took over that plant and reservoirs during consolidation with the former Los Alisos Water District in 2001.
In 1984, IRWD built what was hailed as the largest steel reservoir in the west at that time – the Zone 1 Reservoir on Sand Canyon Avenue. That reservoir is not easily seen behind its screen of landscape, which is intentional.
Building reservoirs on hills has the advantage of providing needed pressure for the system. There are plenty of hills in the IRWD service area conducive to reservoir construction, making “water tower” reservoirs unnecessary.
For more information on sources of IRWD water, please visit our website.
IRWD Educates And Celebrates During May
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May is Water Awareness Month and it is during this time Irvine Ranch Water District and the California Water Awareness Campaign helps customers rediscover the most precious resource on Earth. In life or business, everything begins with water, and in California, every drop counts.
“It’s important for residents to know where their water comes from and that it needs to used wisely in both wet years and dry,” said IRWD Board President Mary Aileen Matheis.
Annually IRWD marks Water Awareness Month by educating our customers on several Resident Tours. The next tour is Saturday, May 19. These tours are an excellent way to learn about IRWD, how water gets to the tap and what happens after it goes down the drain. Tour information is located on our website.
The Water Awareness Campaign was born from one of the state's worst droughts, from 1987 to 1992. In Southern California, a normal rainfall year could be followed by several drought years. We basically live in a desert without many natural water sources, so it needs to be imported from somewhere else.
Where your water comes from depends on where you live within the water district. IRWD drinking water comes from two primary sources – local groundwater and imported water. Blending of these two sources varies according to the time of year.
Approximately 48 percent of our overall supply comes from local groundwater wells in the Orange County Groundwater Basin, and the Irvine and Lake Forest sub-basins. In 1979, the Dyer Road Wellfield Project was developed in Santa Ana and provides low-cost, high-quality drinking water. IRWD operates 25 groundwater wells in our service area, with more planned and under development.
Around 27 percent of IRWD’s drinking water is purchased from the Metropolitan Water District of Southern California. This imported water comes from the Colorado River via the Colorado River Aqueduct and from Northern California via the State Water Project, or California Aqueduct. The Colorado River Aqueduct water must travel 250 miles to reach Orange County, while the State Water Project transports supplies more than 400 miles.
Additionally, IRWD has an impressive recycled water program. At IRWD, we believe water is too valuable to only use once, so every drop of recycled water used for irrigation, industrial uses and toilet flushing, saves drinking water. This allows us to keep our water rates low.
One of our newest additions to our water portfolio is water banking. This is an important tool and opportunities for groundwater banking programs in Southern California are limited. IRWD has entered into a 30-year water banking partnership with the Rosedale-Rio Bravo Water Storage District in Kern County. Unlike other existing Kern County water banking arrangements, IRWD's partnership with Rosedale provides long-term equity ownership of water banking capacity rather than the typical contract or lease arrangements employed by other agencies.
Information about the IRWD water supply is available at our website.
