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HomeMy WebLinkAboutSupplemental Communication from Mayor Pro Tem SteeleM218 Water/Sewer Fiduciary “Fiduciary responsibility”refers to the legal and ethical obligation of a fiduciary to act in the best interests of their clients or beneficiaries. This includes prioritizing the needs of the client above personal interests and establishing a relationship based on trust. Common fiduciaries include business partners, directors, trustees, and advisors, who are expected to uphold duties such as care, loyalty, good faith, confidentiality, and disclosure. M218 Process ▪Proposition M218, approved by California voters in November 1996, significantly reformed local government finance by requiring voter approval for most local taxes, assessments, and property-related fees. M218 Process ▪Proposition M218, approved by California voters in November 1996, significantly reformed local government finance by requiring voter approval for most local taxes, assessments, and property-related fees. ▪“Special Benefit Assessments on real property must provide a specific benefit to the property (e.g., sewer or water improvements) and be proportional to the benefit received. Local governments cannot use assessments for general services like police or fire. M218 Process ▪Proposition M218, approved by California voters in November 1996, significantly reformed local government finance by requiring voter approval for most local taxes, assessments, and property-related fees. ▪“Special Benefit Assessments on real property must provide a specific benefit to the property (e.g., sewer or water improvements) and be proportional to the benefit received. Local governments cannot use assessments for general services like police or fire. ▪“Fees for services like water, sewer, or refuse collection cannot exceed the cost of providing the service. Local governments must notify property owners and allow protests; a majority protest can block the fee.  “Leisure World Doesn’t Pay Their Fair Share”  “Leisure World Doesn’t Pay Their Fair Share” ▪History: Built between 1961 and 1964  “Leisure World Doesn’t Pay Their Fair Share” ▪History: Built between 1961 and 1964 ▪We built our own water distribution and sewer system  “Leisure World Doesn’t Pay Their Fair Share” ▪History: Built between 1961 and 1964 ▪We built our own water distribution and sewer system ▪LW pays the same price for Fixed meter charge  “Leisure World Doesn’t Pay Their Fair Share” ▪History: Built between 1961 and 1964 ▪We built our own water distribution and sewer system ▪LW pays the same price for Fixed meter charge ▪LW pays the same Volume price  “Leisure World Doesn’t Pay Their Fair Share” ▪History: Built between 1961 and 1964 ▪We built our own water distribution and sewer system ▪LW pays the same price for Fixed meter charge ▪LW pays the same Volume price ▪We divide our water bill by 6,800 apartments  “Leisure World Doesn’t Pay Their Fair Share” ▪History: Built between 1961 and 1964 ▪We built our own water distribution and sewer system ▪LW pays the same price for Fixed meter charge ▪LW pays the same Volume price ▪We divide our water bill by 6,800 apartments ▪We built it. We paid for it. We own it. We maintain it.  “Leisure World Doesn’t Pay Their Fair Share” ▪History: Built between 1961 and 1964 ▪We built our own water distribution and sewer system ▪LW pays the same price for Fixed meter charge ▪LW pays the same Volume price ▪We divide our water bill by 6,800 apartments ▪We built it. We paid for it. We own it. We maintain it. ▪LEISURE WORLD PAYS THEIR FAIR SHARE. END OF STORY  “Besides...” ▪If Seal Beach wanted to change the way LW pays for water – “door fee” or some other mechanism ▪Ballot Measure by all the voters in SB ▪The utility users affected by this M218 process cannot impose new charges on LW ▪The voters cannot “confiscate” LW’s water and sewer system ▪This would be vigorously opposed by LW Employee Compensation Myth’s Employee Compensation Myth’s ▪Myth: Employees are getting a 40%+ pay increase or an 8% pay increase Employee Compensation Myth’s ▪Myth: Employees are getting a 40%+ pay increase or an 8% pay increase ▪Truth: Employee time that is attributable to running the utility business is paid for by the utility business. ▪Billing, payables and collections –pay-as-you-go ▪Maintenance by public works employees –pay-as-you-go ▪Executive –a fixed percentage of their paycheck Suggested Alternatives ▪I have listened to many constituents who are concerned about increasing the water rates. Suggested Alternatives ▪Phase in the projects ▪Use main street parking revenue or Measure GG revenue ▪50 years experience in construction or experience in water/sewer systems, and so on... ▪With so many suggestions from concerned citizens, we would be evaluating various options ad infinitum, never solving the problems, with no one on the “professional hook” Professionals ▪Iris Lee –Director of Public Works – ▪25 years of engineering experience ▪20+ years of water/sewer experience ▪Certified Water Distribution Operator ▪Registered Professional Civil Engineer ▪Steve Gagnon ▪28 years experience engineering ▪16 years experience in financial planning and rate setting ▪Series 50 Municipal Advisor ▪Master of Environmental and Engineering Professionals ▪We hire experts. We pay experts. Experts who are educated, certified and experienced. ▪Compared to a variety of suggestions from the well-meaning public IMHO: To ignore the advice of the professionals we pay would be an irresponsible abdication of my fiduciary duty.  Not Just Empty Words ▪Leisure World Cares Fund. www.lwcaresfund.org Here’s My Logic ▪First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24)  2024 Audited Results Here’s My Logic ▪First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24) ▪The utility Enterprise is losing money every single month. Here’s My Logic ▪First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24) ▪The utility Enterprise is losing money every single month. ▪We are already in violation of our loan covenants on existing loans. Here’s My Logic ▪First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24) ▪The utility Enterprise is losing money every single month. ▪We are already in violation of our loan covenants on existing loans. ▪In the last 2 years, there have been 3 major water main failures Here’s My Logic ▪First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24) ▪The utility Enterprise is losing money every single month. ▪We are already in violation of our loan covenants on existing loans. ▪In the last 2 years, there have been 3 major water main failures ▪Last year, all 3 pump stations were down at the same time. Here’s My Logic ▪First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24) ▪The utility Enterprise is losing money every single month. ▪We are already in violation of our loan covenants on existing loans. ▪In the last 2 years, there have been 3 major water main failures and ▪All 3 pump stations were down at the same time. ▪Repairs on the pump stations are becoming more expensive because spare parts have to be custom made. Here’s My Logic ▪First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24) ▪The utility Enterprise is losing money every single month. ▪We are already in violation of our loan covenants on existing loans. ▪In the last 2 years, there have been 3 major water main failures and ▪All 3 pump stations were down at the same time. ▪Repairs on the pump stations are becoming more expensive because spare parts must be custom made. ▪By not passing last year’s M218 water study, Seal Beach has incurred a $5.1 million loss in revenues. Here’s My Logic ▪First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24) ▪The utility Enterprise is losing money every single month. ▪We are already in violation of our loan covenants on existing loans. ▪In the last 2 years, there have been 3 major water main failures and ▪All 3 pump stations were down at the same time. ▪Repairs on the pump stations are becoming more expensive because spare parts have to be custom made. ▪By not passing last year’s M218 water study, Seal Beach has lost $5.1 million in lost revenues. ▪The longer we wait to do these capital improvement projects the more expensive they’ll get. Vote “YES” on Option 1 ▪I urge my colleagues to join me in doing what is best for the future of Seal Beach, insure our ability to access running water and flush our toilets, ▪vote “YES” on Option 1