BOARD AGENDA MEMORANDUM
SUBJECT:
Title
State Water Project Tax Discussion.
End
RECOMMENDATION:
Recommendation
Consider information provided by staff and provide policy direction as necessary.
Body
SUMMARY:
The State Water Project (SWP) is a system of reservoirs, aqueducts, power plants, and pumping plants. Its main purpose is to store water and distribute it to urban and agricultural water suppliers in Northern California, the San Francisco Bay Area, the San Joaquin Valley, and Southern California.
The SWP Tax is a tax that may be levied by the SWP contractors to pay their obligations arising from their SWP water supply contracts with the California Department of Water Resources (DWR). In 1960, State voters approved the SWP indebtedness, which is paid for by the SWP Tax. Because this indebtedness was approved by the voters prior to the 1978 passage of Proposition 13, it is considered an "override tax", not subject to Proposition 13 limitations.
The SWP Tax was initially levied by the District in fiscal year (FY) 1979-80 after passage of Proposition 13 when the District's "5 cent" property tax revenue was reduced by 58%. When the District levies a SWP Tax to pay for its SWP water supply contractual obligations, both Water Code Section 11652 and the District's SWP water supply contract require that levy be placed upon all property within the District's jurisdiction not exempt from taxation.
For many years, the Board has adopted resolutions affirming its intent to rely on the SWP Tax to pay for 100% of the District's financial obligations under its SWP water supply contract. There is a broad range of reliance on the SWP Tax among the other 28 SWP contractors to pay financial obligations under their SWP water supply contracts.
The District's April 2018 SWP Tax levy projection ranges from $18 million in FY 2018-19 to $34 million in FY 2027-28, with the corresponding average annual SWP Tax bill for a single-family residence ranging from $27 to $46 per ...
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