TWD Budget Repays Private Backers By Taxing Landowners

"Formation Cost Reimbursement"

Dear Water Defender:

We’ve uncovered information that calls into question whether the purpose of the recent TWD election was properly described to voters as required by law.

The Notice of Public Hearing that accompanied the ballot stated that the purpose of the $6.45/acre assessment was for TWD "...to cover its fixed costs... general and administrative expenses (e.g. staffing & office expenses)”.  

When we read the TWD Engineers Report, however, we discovered a disturbing omission in the listing of what the assessment fee will pay for. Under the heading of General and Administrative Expenses, in addition to office expenses, etc., there is this:

"Formation Cost Reimbursement: ...covers the equitable reimbursement of costs incurred during the establishment of TWD, which includes legal, engineering, and administrative expenses essential for forming the District. By reimbursing these costs, the District ensures that all landowners who benefit from TWD's services contribute fairly to its foundational investments. “

The so-called "assessment" the TWD board put before the voters was, as a matter of law, a TAX.  Being taxed to pay Formation Cost Reimbursement raises questions that those required to pay for the reimbursement have a right to know:

    * How does "cost reimbursement" sync with "fixed costs" such as "staffing and office expenses”?    
    * What is the total amount of the reimbursement? Does repayment include interest?
    * Who put up the original money and what did that money pay for?
    * Why did the TWD Board not inform landowners within the District of this cost reimbursement before the election? 
    * Why should TWD-area landowners pay a reimbursement for expenditures that they knew nothing about and were not party to making?

In June 2017, the AGUBC (Agricultural Groundwater Users of Butte County) was selected by the Board of Supervisors to establish the TWD. Membership in AGUBC, a private ag-industry association, is by invitation only, and costly – the initial membership fee was $2,500.  Also, their meetings have been closed to the public, and no public record has been kept of what has occurred at those meetings.

From their origins behind closed doors, the TWD emerged as a quasi-governmental entity designed to exclude the entire City of Chico and its voters from any say in its management or activities.

And now, after a second undemocratic, acreage-based election, approved by a minority of landowners, all TWD-area landowners will be compelled to repay expenses incurred by the founders of TWD, even though these expenses were not known to them and they had no say in how that money was spent. 

None of those earlier costs have ever been explained or accounted for publicly, nor were they mentioned in the election materials or on the ballot. 

This fight is not over!

The Groundwater for Butte Team

From the Engineers Report:

General and Administrative Expenses (pg. 23) – lays out inclusion of Formation Cost Reimbursement in the budget:

Notice of Public Hearing (pg. 95) i.e. the election announcement – makes no mention of Formation Cost Reimbursement: