August 30, 2023 -

Probolsky Research Survey - Misleading Statements and SJWD Responses

Citrus Heights Water District is sponsoring a survey by Probolsky Research, purportedly about “issues facing your community”. San Juan Water District is referenced 14 times in the survey, with the following statements in the survey being misleading or erroneous. Correct information is provided in the responses.

1.    San Juan Water District controls the majority of the region’s water supply and is now squeezing more money from the smaller water providers that serve local residents and businesses.

Reply: San Juan Water District does not control the majority of the region’s water supply – that is a role served by the Bureau of Reclamation, which operates Folsom Reservoir. San Juan does provide wholesale treated drinking water supplies to Citrus Heights and Fair Oaks Water Districts, Orangevale Water Company, a portion of the City of Folsom (Ashland) and San Juan’s retail service area. San Juan adjusts wholesale rates as necessary to cover the costs of that part of its operations, and the retail agencies that buy wholesale water from San Juan pay the same rates (as is required by state law).

2.    San Juan Water District has low rates for a small wealthy community it serves water to directly. In order to provide these lower rates to these customers, they increase water rates on everyone else in the service territory.

Reply: As noted in the answer to Statement 1, San Juan must apply the same rates to all of the retail agencies that buy wholesale water from San Juan – including San Juan’s retail service area. None of these retail agencies subsidizes any of the others.

3.    San Juan Water District is the water wholesaler in the region, and may be looking to take over nearby retail water districts. Local water districts know best how to serve their individual communities and we should resist any attempt to be absorbed by San Juan Water District.

Reply: San Juan is not looking to take over nearby retail water districts. In 2014 and 2015, San Juan had discussions with Sacramento Suburban Water District (SSWD) about a potential merger, but those discussions have ended. Since that time, San Juan and SSWD have collaborated more closely via contractual partnerships.

4.    San Juan Water District is raising the price of the wholesale water that it sells to other water agencies who will in turn be forced to raise rates. Local water districts should resist this cost increase to protect their customers.

Reply: As noted in the reply to Statement 1, San Juan adjusts wholesale and retail rates as necessary, to ensure that revenues are adequate to cover San Juan’s expenses, which are necessary to ensure reliable high quality water supplies. As a Community Services District, San Juan is prohibited from charging customers more than the cost of providing water service (e.g., San Juan makes no “profit”). San Juan’s rates are designed to ensure its fiscal stability, and to avoid issuing debt, whenever possible. San Juan’s wholesale rates are the lowest in California, and San Juan’s retail rates are some of the lowest in the Sacramento region.

5.    San Juan Water District is raising its fixed rates it charges retail water agencies to more than 80%. This means that your local water provider will have to pay hundreds of thousands of dollars per month no matter how much water residents like you use.

Reply: San Juan has just completed a draft wholesale financial plan and rate study. In that plan, San Juan proposes a change to its wholesale rate structure to raise the revenues from fixed charges from 74% of the total revenue to 83%. This change is to bring revenues in alignment with costs, 83% of which are fixed in San Juan’s wholesale operations. This approach is similar to that employed by the retail agencies that buy water from San Juan wholesale, whose revenues from fixed monthly or bi-monthly charges are in the 70-75% range. By matching fixed costs with adequate fixed revenues, San Juan avoids the need to impose surcharges when consumption drops (such as during severe droughts).

6.    While San Juan Water District is a government agency, it does not consider the needs of all residents in its service territory. Some residents are talking about changing the governing structure of San Juan Water District, so that it is divided into retail and wholesale agencies. The wholesale agency would be governed by representatives from all affected local water providers. The retail area would be governed by representatives from just its area. Do you support or oppose changing the governing structure of San Juan Water District?

Reply: San Juan Water District is governed by a Board of Directors who are elected from throughout San Juan’s wholesale service area. Those positions had been elected at-large (meaning every Board member represented the full service area), and they are now transitioning to being elected from five geographic divisions that cover the wholesale service area. The 2024 election will complete this process of elections by division. San Juan has no plans to establish a new agency for its retail service area. In fact, the policies of both the Sacramento County and Placer County Local Agency Formation Commissions (the bodies that approve the creation of new local governments) discourage the creation of new governmental agencies in areas already served by other local governments.

For the Wholesale Financial Plan and Rate Fact Sheet, please click here.