The Truth About Felton

Why did Felton want public ownership of their water?
In 2008 Felton was paying $69 a month for 5,000 gallons of water under Cal Am ownership.
Their neighboring public water system, San Lorenzo Valley Water District (SLVWD), was only paying $32 a month for that same amount of water. At that time Cal Am was requesting a 74% increase.

Like many other cities around the world they decided it was time to take their water back. They wanted lower rates, local control and environmental sustainability.
What did Cal Am do to try and stop them?
They ran a campaign of lies and misinformation to sow fear, uncertainty and doubt (FUD). They formed paid fake community groups that spoke out against the buyout. They even threatened to defeat politicians who supported the buyout.

But Felton prevailed with a campaign to educate their community with the facts. A big part of this was their door to door, talk to your neighbor campaign. They managed to talk to every household in the community (1,400).
How was a purchase price set?
Cal Am continued to say they were not for sale, but at one point they claimed the Felton system was worth $46 million. Felton’s research showed that Cal Am had paid only $2 million for the Felton system a few years earlier. SLVWD appraised the system at $7.6 million. Eventually Cal Am appraised it at $25.6 million. They settled out of court for $11 million.

Felton expected to pay $10 - $12 million. In the end they paid $11 million, just as they expected.

Why did Felton decide to put the purchase price on their property taxes?
Felton was being adopted into an existing water district (SLV) and they could not finance the bond any other way. They used a Mello-Roos special tax that was added onto their property tax to repay the bond principle and interest over 30 years.
What happened to Felton’s water costs over the last 10 years?
In 2008 Felton’s water cost was $69 a month. In 2018 their water cost is $96 a month. Both costs are figured on 5,000 gallons monthly. Over the past 10 years Felton’s water has only increased by 39%.
What would Felton pay today if they had stayed with Cal Am?
Felton had done a 30 year cost projection on what they anticipated their costs would be under SLVWD and under Cal Am. They projected that their costs would roughly double over that time if they stayed with Cal Am. Their projected cost under SLV is only $14 dollars a month higher today than what they projected it would be 10 years ago. And that includes the cost of taking care of significant system repairs that were not disclosed by Cal Am at the time of purchase.

How do Felton’s water costs compare to the Monterey Peninsula’s over the last 10 years?
Another way to look at what Felton’s costs would have been had they stayed with Cal Am is to apply the increase the Peninsula has seen over the last 10 years.

In 2008 the cost for 5000 gallons on the Peninsula was $38 a month. Today it is $102 a month. That’s a 168% increase. Remember Felton has only seen a 39% increase over that time under public ownership!

If Felton had seen the Peninsula’s 168% increase over the last 10 years they would be paying $184 a month now instead of $96. In this projection a Felton household saved $88 a month, $1056 annually or a total of $10,560 over 10 years with public ownership.
                                                                           Monthly                  Annually
Felton Cal Am – 2008                                         $69                        $828
Monterey increase over 10 years                                     168%
Felton Cal Am – 2018 projected                         $184                       $2,211
Felton SLVWD – 2018                                        $96                         $1,152
Savings with public ownership                            $88                         $1,056
How does Felton’s water system compare to the Monterey Peninsula’s?
Felton made the point that comparing the two systems is like comparing apples and oranges.
Felton is a very small water system with less than 1,400 connections. The Monterey Peninsula has 40,000 connections. Tiny water systems like Felton typically have much higher water costs. Larger water systems have economies of scale. Felton was amazed that our water costs more than theirs.  Historically that had not been true.

In addition, Felton does not have tiered water rates. Everyone pays the same cost per unit.

Under public ownership does Felton have control over their water rates?
Yes, they can vote down a rate increase with a simple majority vote. They can and have negotiated with SLVWD over proposed rate increases and reached agreement for lower rate increases. Many of the rate increases they have seen under public ownership are to repair their system after years of private ownership neglect.
What are Felton’s costs with the addition of the bond payment?
When the bond was first issued, it was $535 a year per household or about $45 a month.
They were able to refinance the bond after a year. It dropped to $448 a year or about $37 a month.
In 20 years they will own the system.

Felton’s total monthly cost of $37 for the bond + $96 for water is $133 a month for 5,000 gallons.

Felton’s total cost has gone up 93% over the last 10 years if you include the cost of buying their water system.

The Monterey Peninsula’s cost has gone up 168% over the last 10 years.
We’re still renting.