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Water district considers tax hike

Declining property values may force an increase in property taxes on SCV homes

Posted: July 11, 2009 8:40 p.m.
Updated: July 12, 2009 4:55 a.m.

Castaic Lake Water Agency could be forced to raise property taxes so it can continue bringing water from the Sacramento Delta to Santa Clarita faucets.

Declining property values could for the move, said Valerie Pryor, administrative services manager for the agency.

“We did a preliminary estimate to adjust our portion of the property tax revenues to 5 percent of every $100 of home valuation,” Pryor said last week. The current tax rate is 4 percent of every $100 of home valuation.

For a $400,000 Santa Clarita Valley home, the annual tax bill for state water amounts to $160. If Castaic Lake Water adopts a 5-cent tax on each $100 of home valuation, the bill jumps to $200.

The 1-percent hike is still a preliminary estimate, Pryor said. “Until we receive the county’s assessment, we can’t be sure how much taxes could go up,” she said.

Pryor’s words came days after Castaic Lake Water received its $21 million water bill from the California Department of Water Resources, which oversees the State Water Project.

The State Water Project delivers water from the Sacramento Delta to thirsty Southern California communities, including those in the Santa Clarita Valley.

Castaic Lake Water Agency is a wholesaler that resells State Water Project water to four Santa Clarita Valley retailers. Those retailers, in turn, sell the water to residents.

State water makes up nearly 50 percent of the drinking water in the Santa Clarita Valley, said Dan Masnada, general manger for Castaic Lake Water.     

Of the $21 million paid to the Department of Water Resources, nearly $16 million pays for the maintenance of the system, the energy plants along the route and the debt service to pay for the state water project, Pryor said.

“When the system was constructed between the 1960s and the 1980s, it was debt financed. We’re paying back part of the bond, and those payments don’t end until 2035,” she said.

Another $5 million pays to deliver the water, and the bulk of that cost pays for the energy consumption related to delivering the water to Southern California.

“Almost all the $5 million goes toward energy,” Pryor said.

News of the proposed tax rate increase rankled some Santa Clarita Valley residents.

Jimi Corona, a 40-year-old real estate agent from Canyon Country, said raising taxes tarnishes the allure of moving to Santa Clarita.

“There is still a desire to move to Santa Clarita, but everyone wants in at an entry-level price range. With very few choices in the housing market at that price, higher taxes don’t make anything easier.”

Allison Willis, a 46-year-old social worker from Castaic, likened the proposed increase in taxes to the increase in other utilities.

“I’m strongly against the tax and feel it’s similar to the utilities scandals in which the price of electricity skyrocketed,” she said.

Willis said the priority should shift from tax increases to how water utilities are using the allotted resources.

“The water authorities seem to feel we have plenty of water when we open a new development, especially the Newhall Ranch Project,” she said. “If there is insufficient water, then these developments shouldn’t be approved.”

With continuing calls for conservation by state and local water agencies, Willis wants to make sure the Santa Clarita Valley has enough water to maintain existing residences.

“I don’t want to turn my yard into a rock garden to provide water for thousands of more residents,” she added.

Intern Evin Giglio contributed to this report.



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