The Vallejo Lakes Water System -- An Introduction
On January 23, 2014, the Green Valley Landowners’ Association (GVLA) filed a class action lawsuit against the City of Vallejo for its’ discriminatory water billing practices. At issue is Vallejo’s “Lakes Water System” (LWS), and the fundamental right of approximately 800 families who reside outside of Vallejo to receive affordable water.
The LWS is a large municipal water system created by Vallejo in the early 1900’s. The LWS was Vallejo’s only source of water for approximately six decades. Without it, Vallejo would likely not exist.
The LWS consists of three reservoirs in the hills above Green Valley and in Napa’s Gordon Valley. At the time, the Solano Republic described Vallejo’s actions as a “gigantic water grab.” Water from these reservoirs was, until recently, transmitted by large, municipal-sized pipes over 20 miles to Vallejo.
Although the LWS was constructed to provide water to Vallejo, Vallejo allowed a handful of non-residents to connect to the LWS system and receive water. Vallejo did this without any master plan as a short-sighted means of raising additional revenue for its water system. Today, approximately 800 families in Green Valley, Gordon Valley, Cordelia, Willotta Oaks and American Canyon receive water from Vallejo’s LWS.
For almost 100 years, Vallejo shared in the costs of the LWS (which Vallejo later described as “critical” to the City’s municipal water supply). However, in 1992, Vallejo unexpectedly and unilaterally passed an ordinance shifting 100% of the cost of the LWS – formerly shared by over 30,000 connections within Vallejo – onto the backs of several hundred non-resident families. These families had no vote and no say in Vallejo’s decision.
Not surprisingly, when Vallejo decided its’ 30,000 resident connections would no longer pay for any of the LWS, the costs to the remaining 800 non-resident families in Solano and Napa counties skyrocketed. Today, the average water bill within the LWS is approximately $350 – some of the highest in the State. Because Vallejo no longer contributes to the system, according to Vallejo’s own appraisal of the system, the asset cost of the LWS per family is five times greater than the second most asset-intensive water system in California.
To compound the harm, Vallejo failed to perform almost any improvements to the LWS since its creation over a century ago. In essence, not only did Vallejo decide to pass 100% of the costs onto 800 families, it left those families with an outdated, decrepit water system. Today, 74% of the infrastructure is more than 30 years beyond its useful life. The cost of replacing this infrastructure is $24 million. Within 10 years, an additional $6 million in deferred improvements will be needed. Vallejo expects 800 families to foot the bill for this.
To further compound the harm, Vallejo now intends to sell the LWS to a private investor-owned utility (IOU). Unlike Vallejo, an IOU is allowed to recoup its investment, plus profit, from the 800 families who receive LWS water. IOU’s owe fiduciary obligations to their investors – not to the customers.
If the system is sold to an IOU, the IOU would be allowed to make the needed tens of millions of dollars of improvements and recover their capital cost, plus profit, from just 800 families. If this occurs, the average water bill for the remaining 800 families would be approximately $14,000 per year. These rates would be unaffordable. Those residents on fixed incomes (and others who could not afford water bills over $1,000 per month), would be forced to move. Property values would decline by almost $90 million.
This is why the GVLA is acting – to protect the fundamental rights of its members and the LWS customers to affordable water. Public infrastructure projects are possible because the huge costs are shared by the public at large – not several hundred disenfranchised families who live outside Vallejo’s city limits. The GVLA’s legal action seeks to stop a sale to an IOU and to force Vallejo to honor its obligations to the 800 families who have been unfairly and discriminatorily burdened with the cost of maintaining and operating Vallejo’s dilapidated public works system.
On January 23, 2014, the Green Valley Landowners’ Association (GVLA) filed a class action lawsuit against the City of Vallejo for its’ discriminatory water billing practices. At issue is Vallejo’s “Lakes Water System” (LWS), and the fundamental right of approximately 800 families who reside outside of Vallejo to receive affordable water.
The LWS is a large municipal water system created by Vallejo in the early 1900’s. The LWS was Vallejo’s only source of water for approximately six decades. Without it, Vallejo would likely not exist.
The LWS consists of three reservoirs in the hills above Green Valley and in Napa’s Gordon Valley. At the time, the Solano Republic described Vallejo’s actions as a “gigantic water grab.” Water from these reservoirs was, until recently, transmitted by large, municipal-sized pipes over 20 miles to Vallejo.
Although the LWS was constructed to provide water to Vallejo, Vallejo allowed a handful of non-residents to connect to the LWS system and receive water. Vallejo did this without any master plan as a short-sighted means of raising additional revenue for its water system. Today, approximately 800 families in Green Valley, Gordon Valley, Cordelia, Willotta Oaks and American Canyon receive water from Vallejo’s LWS.
For almost 100 years, Vallejo shared in the costs of the LWS (which Vallejo later described as “critical” to the City’s municipal water supply). However, in 1992, Vallejo unexpectedly and unilaterally passed an ordinance shifting 100% of the cost of the LWS – formerly shared by over 30,000 connections within Vallejo – onto the backs of several hundred non-resident families. These families had no vote and no say in Vallejo’s decision.
Not surprisingly, when Vallejo decided its’ 30,000 resident connections would no longer pay for any of the LWS, the costs to the remaining 800 non-resident families in Solano and Napa counties skyrocketed. Today, the average water bill within the LWS is approximately $350 – some of the highest in the State. Because Vallejo no longer contributes to the system, according to Vallejo’s own appraisal of the system, the asset cost of the LWS per family is five times greater than the second most asset-intensive water system in California.
To compound the harm, Vallejo failed to perform almost any improvements to the LWS since its creation over a century ago. In essence, not only did Vallejo decide to pass 100% of the costs onto 800 families, it left those families with an outdated, decrepit water system. Today, 74% of the infrastructure is more than 30 years beyond its useful life. The cost of replacing this infrastructure is $24 million. Within 10 years, an additional $6 million in deferred improvements will be needed. Vallejo expects 800 families to foot the bill for this.
To further compound the harm, Vallejo now intends to sell the LWS to a private investor-owned utility (IOU). Unlike Vallejo, an IOU is allowed to recoup its investment, plus profit, from the 800 families who receive LWS water. IOU’s owe fiduciary obligations to their investors – not to the customers.
If the system is sold to an IOU, the IOU would be allowed to make the needed tens of millions of dollars of improvements and recover their capital cost, plus profit, from just 800 families. If this occurs, the average water bill for the remaining 800 families would be approximately $14,000 per year. These rates would be unaffordable. Those residents on fixed incomes (and others who could not afford water bills over $1,000 per month), would be forced to move. Property values would decline by almost $90 million.
This is why the GVLA is acting – to protect the fundamental rights of its members and the LWS customers to affordable water. Public infrastructure projects are possible because the huge costs are shared by the public at large – not several hundred disenfranchised families who live outside Vallejo’s city limits. The GVLA’s legal action seeks to stop a sale to an IOU and to force Vallejo to honor its obligations to the 800 families who have been unfairly and discriminatorily burdened with the cost of maintaining and operating Vallejo’s dilapidated public works system.