This story starts in March of 2004, when the council announced a huge water rate increase.  In November 2004 council meeting, 31 Citizens of Modeso tried to convince the council to postpone the increase until a flawed Foresight Report could be fixed.  The council ignored a reasonable approach, and imposed this huge increase in water rates.  They even added a perpetual increase based on a San Francisco index.  The consultant’s report clearly said the city needed only a 69% rate increase, but city staff demanded double that, and the council gave it to them.  We believe that is a clear violation of Proposition 218, meaning illegal.   

            Over the last 3 years, we have shown individual city council people that the staff manipulated the numbers in order to justify these obscene rates.  We showed them what the real numbers really are, and we took those numbers from the city’s own publications.  (Apparently, the council does not read these documents.)  City staff does not dispute our numbers; they just say that they “need the money”.

We believe the city has overcharged you and I at least $80 Million dollars during the last 14 years.  Staff does refuse to show where all that money went.   They talk in generalities, saying it was spent on “projects”.  They refuse to tell us what those projects were.  

            Staff agreed to hold a “Water Rate Workshop” last Wednesday, and promised to tell us where the money went, and in particular, to answer the basic question we have asked hundreds of times.  That question is, “What does it cost to produce and deliver one gallon of water to the customers of Modesto?”  They did have the workshop, but never answered the basic question, and never showed us any completed projects, nor even projects which must be built in the future.  They had a 90-minute power point presentation that was totally a waste of our time.  When I protested that they avoided addressing all the important issues we have raised, the Finance Director agreed to tell us what a gallon of water costs.  This is what he put up on the screen:

                        Revenues generated by water sales     =   Cost of one gallon of water

                        Total gallons produced

            Now, you all know just by looking at that formula that the result is not the COST of a gallon, but the REVENUES generated by the sale of a gallon of water!!!!  This is from our DIRECTOR of finance.  When I pointed this out, he denied it, and SO DID THE 6 COUNCIL persons there.  (They were Marsh, Hawn, Keating, O’Bryant, Olsen and Ridenour.)  Well, the BEE properly reported many of us just walked out in disgust. 

            There is no possible explanation of how this finance guy could possibly misunderstand the difference between REVENUES and EXPENSES.  Why then, does the council defend him?  You can include in your speculation, ignorance, stupidity (they are different) and malice.

            We believe that the council has doubled your water rates over the last 26 months.   We believe the current rates are illegal and unjustified.  Then, in an unbelievable act of arrogance, Mr. Finance announced he was going to raise the rates again in 2009.  By the way, the specific law is Proposition 218, which simply says they cannot charge us any more than it costs to produce and deliver the water. 

            What should we do now?  First, the Citizens of Modesto might rise up and demand the honest facts, in writing.  Second, demand a rate reduction until they prove they need more money.  Third, you should carefully analyze for whom you vote in the next council election.  Do you want any of these people making the water AND sewer rate decisions?  Or, will you support new challengers who will actually exercise oversight on these rouge bureaucrats.  Fourth, will you join us in pressing for a legal option?  

            If any one wants a copy of any of the documents we have generated, please e-mail me.  If you want to support our on-going fight, message me.    And please, send this to every one who pays for water in this city.  Thank you very much, Dave

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