Staff outlines tax-roll and water-bill options to recover CAP costs; board schedules more outreach

Staff presented two alternative methods to recover CAP-related capital costs: (1) place a fixed charge on property tax bills collected through the tax roll, or (2) recover costs via the district's water bills (meter-based fixed charges), or a hybrid of the two. Mesa (staff) outlined the mechanics, examples and outreach plan and stressed these figures were preliminary and would require a cost-of-service study and Prop 218 public process before adoption.

Mesa explained how a parcel-based tax-roll charge would be allocated to meter "equivalents" using American Water Works Association (AWWA) capacity ratios so different meter sizes carry proportionate shares of the fixed charge. As a simplified illustration drawn from staff slides, Mesa presented a hypothetical total CAP-related cost of about $4.3 million spread across roughly 7,700 meter-equivalents, producing an illustrative per-unit charge near $560 (rounded) for a 3/4-inch meter-equivalent. Mesa cautioned these sample numbers are not final and that the actual analysis will use updated counts and revenue needs.

Mesa also presented a debt-only tax-roll option to place only the CAP debt and coverage ratio on the tax roll while leaving operation-and-maintenance costs on water bills; that approach produced a lower illustrative per-unit tax-roll charge (roughly $293 per meter equivalent in Mesa's example). Mesa showed how different approaches would affect projected water-bill increases over time under a variety of assumptions (including a previously adopted 7.5% water-rate increase for fiscal 2026). Staff provided several customer examples to show relative impacts but noted the distribution of impacts varies widely with assessed parcel values and meter sizes.

Board members and several directors expressed concerns about transparency and fairness. Several directors said they preferred keeping charges visible on water bills rather than embedding them on property tax statements; others said the property-tax approach spreads the cost across property owners who hold long-term value in the valley. Will Carlson's written comment was read into the record opposing tax-roll billing and urging transparent line items; he called for the district to "sell the necessity and value" of the CAP rather than "hide the costs." Staff said the board will conduct substantial outreach over the next calendar year, include market research and listening sessions, and then initiate a Prop 218 process (staff suggested initiating the Prop 218 sequence in spring of next year with final adoption in the summer months) only after public input and a full cost-of-service analysis.

Mesa noted complications the team will analyze further: parcels with multiple meters (master-meter mobile-home parks, HOAs), exemptions that affect assessed value, and accounting methods to avoid double-charging properties that pay both an impact or intensification fee and later pay on water bills. Staff planned further presentations with account-level detail to show which specific customers would be most affected and to refine outreach materials and survey questions.