PASS WATER AGENCY LOWERS PROPERTY TAX RATE

 

FOR IMMEDIATE RELEASE

AUGUST 14, 2017

The San Gorgonio Pass Board of Directors voted last week to reduce its property tax by a quarter cent, from $0.185 to $0.1825 per $100 of assessed valuation.  The reduction will return over $300,000 to local property owners this year alone.

“We have been working proactively with the California Department of Water Resources for the past several years to do everything possible to reduce our debt service costs on the State Water Project, and those efforts are starting to pay off” said David Fenn, Board President and a Beaumont real estate broker.  “With some large debt service balloon payments coming up in a few years, we want to make sure that we have the reserves on hand to pay them without raising taxes further, but we feel confident that we can return some money to local property owners and still make those balloon payments”, Fenn said.

The property tax imposed by the Agency, granted prior to Proposition 13 in 1978, is used to pay for debt service, operations, and maintenance costs for the State Water Project.  The Agency purchases water from the California Department of Water Resources and conveys it through the California Aqueduct to sell to retail water agencies, who use it to replenish local groundwater basins.  Without the imported water, those basins would not be sustainable sources of water.

The reduction is the first for the Agency since 1992.  The tax rate started a gradual increase after that to cover the cost of constructing the East Branch Extension, the 20-mile pipeline that brings State Water Project water to the Pass from its delivery point in San Bernardino.  The project was constructed in two phases and construction is being completed this summer.  From 2000 through last year, the Board raised the rate only once to cover these construction costs, in 2011.

Many State Water Contractors, as agencies who purchase water through the Project are called, utilize property taxes to pay all or part of the debt service and operations and maintenance costs for the Project, which began construction in the 1960’s.  These costs total over $1 billion per year.  The San Gorgonio Pass Water Agency is one of only 29 such agencies in the State.  Together, they must pay the $1 billion each year.  The State General Fund is not used to pay for any part of the State Water Project.

The rate reduction will result in a cost savings for a $300,000 home of $7.50 per year.  “We know that’s not a lot of money to some people, but we believe this will be the first of a series of reductions over the next several years, and we wanted to get started sooner rather than later,” said Fenn.

The San Gorgonio Pass Water Agency is a regional water supplier, wholesale water agency, and State Water Contractor who purchases water from the California Department of Water Resources, conveys it several hundred miles through the California Aqueduct, and sells it to local retail water agencies to replenish groundwater basins in the Pass.  Its service area includes the cities of Calimesa, Beaumont, and Banning, as well as the incorporated areas of Cherry Valley, Cabazon, the Banning Bench, and Poppet Flat.

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For further information, contact Jeff Davis, General Manager, at 951/845-2577, or via email at jdavis@sgpwa.com.