Some $41.3 billion held in reserve by 250 special districts in California - including $70 million in South San Joaquin Irrigation District coffers - is being eyed by some in Sacramento as a possible solution to the state’s perennial inability to match spending with revenues.
And although the state has no legal authority to take the money, it has been suggested that Sacramento play hardball by threatening to withhold any state funding or federal pass through funds controlled by the state.
That would be extremely problematic to do in the case of SSJID considering in the district’s 102-year history it has never taken or accepted a cent in state or federal money.
“What kind of message is the state sending?” SSJID General Manager Jeff Shields asked. “You run a government agency (in a business-like manner) and build a reserve while providing needed services and then they want to take the money away from you.”
Shields said the $70 million in reserve has been earmarked for three major purposes - lowering retail electrical rates in Manteca, Ripon, and Escalon and the surrounding countryside; putting in place cutting edge water conservation technology; and upgrading canals which in turn reduces water losses plus further improves delivery dependability.
Improved water conservation is a state mandate for irrigation districts which the state is providing no funding to accomplish. If the state were to find a way to raid reserves from irrigation districts up and down the state they would essentially make it impossible to put their own mandate in place without significantly raising taxes and fees.
Shields noted that special districts were created to provide essential services and are expected to operate like a business.
“We’re not like the state,” Shields said. “If we can’t keep expenses in line we can’t go out and take the money we need from somebody else.”
The state has already hit SSJID three times in the last 20 years. Once it was an outright commandeering of property taxes. The other two times was the “borrowing” of property taxes that the state said they’d pay back before now. Altogether, Sacramento has already swiped more than $4 million from SSJID coffers.
The state has the ability to take property taxes but not the funds collected from fees or - in the case of SSJID - the sale of wholesale power on the open market. That ability on property taxes was hamstrung significantly last November when voters passed Proposition 22 to keep most local tax revenues in the jurisdiction they are assessed and collected.
In previous special district raids, the state was able to loot billions from port authorities due to the way they were created. In each case ports such as Oakland and Long Beach were amassing hundreds of millions of dollars with the intent of paying cash for port expansion projects to avoid borrowing. The expansions were aimed at enhancing a critical economic lifeline for California. Instead the state took the money to cover one of annual deficits and forced the port authorities to borrow money for critical expansions.
SSJID has not raised property taxes in over 20 years. Twice they have suspended water charges to district irrigation customers covered from the proceeds of the sale of excess water to other districts.
Tri-Dam System - built in partnership with Oakdale Irrigation District - used bonds secured by property in the two districts. It has had its 50-year debt paid off for more than six years. That has resulted in the SSJID netting after all Tri-Dam expenses more than $12 million annually in recent years as its share of proceeds from wholesale power needs.
PA Consulting, an independent firm hired by the San Joaquin County Local Agency Formation Commission, said that figure is likely to rise to $20.1 million annually in a few years.
It is that money that SSJID is planning to use to make it possible to obtain the PG&E retail power system and invest in upgrades while lowering power costs 15 percent across the board.
And although the state has no legal authority to take the money, it has been suggested that Sacramento play hardball by threatening to withhold any state funding or federal pass through funds controlled by the state.
That would be extremely problematic to do in the case of SSJID considering in the district’s 102-year history it has never taken or accepted a cent in state or federal money.
“What kind of message is the state sending?” SSJID General Manager Jeff Shields asked. “You run a government agency (in a business-like manner) and build a reserve while providing needed services and then they want to take the money away from you.”
Shields said the $70 million in reserve has been earmarked for three major purposes - lowering retail electrical rates in Manteca, Ripon, and Escalon and the surrounding countryside; putting in place cutting edge water conservation technology; and upgrading canals which in turn reduces water losses plus further improves delivery dependability.
Improved water conservation is a state mandate for irrigation districts which the state is providing no funding to accomplish. If the state were to find a way to raid reserves from irrigation districts up and down the state they would essentially make it impossible to put their own mandate in place without significantly raising taxes and fees.
Shields noted that special districts were created to provide essential services and are expected to operate like a business.
“We’re not like the state,” Shields said. “If we can’t keep expenses in line we can’t go out and take the money we need from somebody else.”
The state has already hit SSJID three times in the last 20 years. Once it was an outright commandeering of property taxes. The other two times was the “borrowing” of property taxes that the state said they’d pay back before now. Altogether, Sacramento has already swiped more than $4 million from SSJID coffers.
The state has the ability to take property taxes but not the funds collected from fees or - in the case of SSJID - the sale of wholesale power on the open market. That ability on property taxes was hamstrung significantly last November when voters passed Proposition 22 to keep most local tax revenues in the jurisdiction they are assessed and collected.
In previous special district raids, the state was able to loot billions from port authorities due to the way they were created. In each case ports such as Oakland and Long Beach were amassing hundreds of millions of dollars with the intent of paying cash for port expansion projects to avoid borrowing. The expansions were aimed at enhancing a critical economic lifeline for California. Instead the state took the money to cover one of annual deficits and forced the port authorities to borrow money for critical expansions.
SSJID has not raised property taxes in over 20 years. Twice they have suspended water charges to district irrigation customers covered from the proceeds of the sale of excess water to other districts.
Tri-Dam System - built in partnership with Oakdale Irrigation District - used bonds secured by property in the two districts. It has had its 50-year debt paid off for more than six years. That has resulted in the SSJID netting after all Tri-Dam expenses more than $12 million annually in recent years as its share of proceeds from wholesale power needs.
PA Consulting, an independent firm hired by the San Joaquin County Local Agency Formation Commission, said that figure is likely to rise to $20.1 million annually in a few years.
It is that money that SSJID is planning to use to make it possible to obtain the PG&E retail power system and invest in upgrades while lowering power costs 15 percent across the board.
