OPINION: The Cost of Water is Out of Control and Getting Worse

We need to exercise our Prop. 218 right to protest.


By Richard Aurelio 

Ultimately, we need to question why PHWD exists, and establish a business plan to consolidate districts to reduce overhead and improve our negotiating position with SFPUC for the cost of water. But, in the short term, we need to better manage what we have, while we position for the future.

Los Altos Hills conservation efforts over the last 4 years have reduced consumption 26 percent while costs grew 23 percent and the cost of water from SFPUC (San Francisco Public Utilities Commission) is up 56 percent and expected to triple, with little to no negotiating clout by the numerous water districts. 

Fortunately, Prop. 218 allows residents to challenge this increase by sending a letter to:  Purissima Hills Water District, Attention Protest Water Rate Increase, 26375 Fremont Rd, Los Altos Hills, 94022; and must be received up to the public hearing portion of April 11 meeting (not just postmarked). Please include your service address or account number. No email protests will be accepted. 

The PHWD has posted its justification for this increase and it is available on their web site shown below.  In summary, it says that the short term increase is to make up for budget short falls experienced since the last increase 2 years ago and to establish a procedure for putting future increases on "Auto Pilot," passing on unlimited and uncapped future SFPUC rate changes and adjustments for inflation by a simple vote of the board. 


The proposed rate increase  is $.51 per unit (a 10- 18 percent increase, depending on usage) effective April 11.  SFPUC has already stated that this rate will double by year end, and more than triple over the next 5 years.  As you are well aware, our water is already some of the most expensive in the U.S. and to approve this latest increase would allow future increases to go unchallenged.

What is not in the report, is a plan for cutting costs and improving negotiating clout with SFPUC (for example: Combing LAH and LA water districts could cut overhead costs by at least 50percent), investigating an alternative supplier to SFPUC, possibility for  renegotiation of SFPUC rates through the Bay Area Water Supply and Conservation Agency (BAWSCA), and an explanation of why costs have increased while consumption has declined and what are the plans to counter this trend.   

Unmotivated to reduce costs through consolidation of water districts or implementation of best business practices, the PHWD has simply passed on their costs, and continues to, through monopolistic pricing power.  While we do have the right to protest under Prop 218, PHWD hires consultants that are paid over $300K/year to teach them how to skirt 218  with opaque communications and biased rate studies.  

Do any of you remember reading that:  Cal Water approached PHWD to consolidate with Los Altos?  Cal Water Los Altos rates are up to 1/3 the cost of PHWD (top rate $3.83 vs $9.95)? Or, that PHWD paid a 6-figure undisclosed harassment settlement, which was, of course, passed on to us in the last rate increase and is now being used to justify this one?  That we have been paying Santa Clara Valley Water district for a back up water supply, but never received any water?  Or that while we pay 11 percent of our property tax to the fire district, we have hardly taken advantage of their responsibility to  pay for the upgrades required to meet their standards for fire protection water delivery? 

Monopolistic pricing makes management easy. It allows costs to simply be passed on to the end users with no incentive by management to contain them …

Please challenge this one by exercising your protest rights per Prop. 218. It is time to hold PHWD accountable.

Richard Aurelio, resident of Los Altos Hills since 1990, retired from Varian Associates and is happily married to Linda, with four grown children.

Kristen Emery April 12, 2012 at 06:15 AM
Richard, I am curious about the details of the undisclosed harassment suit that was settled a few years ago. Is there any public information on this issue for residents to read? Thanks!
David Bergman April 12, 2012 at 09:04 PM
Hi Richard, The 11% is an incorrect figure - the Fire District does not receive 11% of property tax dollars. The fire District has participated in many upgrades to the PHWD and Cal Water systems - when it relates to Fire Safety. We have a number of programs we have participated - with both Water Districts serving the Fire District. We as a Fire District have been very proactive in participation in construction projects - but we can only pay for a portion of programs which relate directly to Fire Safety. Most Fire Districts are not able to participate in such upgrade programs. David Bergman President – Los Altos Hills County Fire District www.LAHCFD.org
richard aurelio April 12, 2012 at 11:18 PM
details are not public as the phwd did not publish or disclose. my understanding is that it was settled for about 100k to "make it go away" rather than fight.
richard aurelio April 12, 2012 at 11:20 PM
Thanks David for the feedback, the 11% number came from a public hearing and was part of the PHWD presentation. Could you please advise what the correct number is, and how much you have put back into the water district for upgrades...vs total tax dollars collected over that same time period?


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