The article you’re about to read is from our reporters doing their important work — investigating, researching, and writing their stories. We want to provide informative and inspirational stories that connect you to the people, issues and opportunities within our community. Journalism requires lots of resources. Today, our business model has been interrupted by the pandemic; the vast majority of our advertisers’ businesses have been impacted. That’s why The Capistrano Dispatch is now turning to you for financial support. Learn more about our new Insider’s program here. Thank you.

Larry Kramer
Larry Kramer

By Larry Kramer 

I hope you are enjoying your refund from the city as a result of the John Perry water lawsuit, but its long-term effects will make most of you wish this lawsuit had never been filed.

First, your refunds are not some ill-gotten gains the city received because of “illegal” tiered-water rates. No, those refunds are currently being paid from our sewer fund, which had a reserve and is being temporarily tapped. The money eventually has to be paid back from the water fund and you will pay for it.

Utility Department funding is separate from city funding and is a zero sum game. If yearly operating costs are $20 million, then that is how much the city charges for water. The question is how to divide it up. Under the old system, those using the least amount of water were paying for water below cost. As the amount of water used went up, so did the cost per unit of water. Thus there was incentive to conserve and disincentive to waste water.

This lawsuit has shifted some of the burden of payment from water wasters to prudent water users.

You may have seen some effect already but there is more to come. For smaller lots, your basic charge and the charge for water usage have already gone up. A higher lowest tier rate and higher basic charges went into effect July 1, 2014. Charges were increased again in July 2015.

The real effect will come if City Council has the courage to conduct another rate study. That is needed because much has changed since 2014:

  1. The water utility owes the sewer utility about $2.7 million.
  2. The $884,000 legal costs to settle the lawsuit with Capistrano Taxpayers Association was unchallenged by Perry and his friends on the City Council.
  3. The lawsuit by San Juan Hills Golf Club against the water department is unsettled.
  4. The city is conducting a utilities organizational study at a cost so far of $400,000.
  5. $35,000 has been appropriated for drought outreach.
  6. The annual groundwater recovery plant lease payment is about $2 million regardless of usage.
  7. Imported water cost is rising about 5 percent per year.
  8. Because of conservation, fixed costs must be spread over fewer gallons of water used.
  9. GWRP is operating at a lower capacity, thus there is less subsidy from Metropolitan Water District.

The city may say that we are going to offset these costs by operating efficiently, but there are few ways to reduce costs:

  1. Reduce staff—this has happened already because city staff has seen John Perry’s future and left to use their expertise elsewhere, but I do not believe the city has fired anyone in the Utilities Department or reorganized to improve efficiency.
  2. Defer maintenance in one of the older infrastructures in the county.
  3. Obtain supplies at a lower cost. (Most costs are going up.)
  4. Become part of a larger organization creating economies of scale but with less control.

The council took action counter to that recommended by their consultant. They are now restricting reorganizing options only to public agencies. They know they have created a “hot potato” (the Utility Department) and need to get rid of it before they get burned.

The net result of John Perry’s lawsuit:

  1. Higher water bills for prudent water users with smaller lots.
  2. Lower water bills for water wasters with large lots.
  3. A loss of control of setting utility rates.
  4. Deferred maintenance with attendant system failures.
  5. Deficit spending until an agency has the courage to set proper water rates.
  6. Probable loss of our water rights.

What can you do? As City Councilman Sam Allevato said, “Pay attention to what the council is doing with the Utility Department. It is one of the most important projects ever undertaken in the city.”

Larry Kramer is a retired United States Naval submarine Captain, former San Juan Capistrano mayor and former city councilman. While on the council, Kramer served as vice chairperson of the San Juan Basin Authority and vice chairperson of the South Orange County Wastewater Authority.

Trustworthy, accurate and reliable local news stories are more important now than ever. Support our newsroom by making a contribution and becoming a subscribing member today.

About The Author Capo Dispatch

comments (18)

  • Well said, Captain. I cut my water bill from about $35.00 a month to $8.00 a month by replacing grass with a rock garden and replacing plants requiring large amounts of water with drought tolerant plants. I also put in dual flush toilets and water recycle pumps that return the cooled down water in the hot water lines back into the cold water lines until the hot water reaches the pump. The hot water is then redirected to the faucet, less than a foot distant in most cases. I also installed water barrels, and while they have remained near empty, they have filled up some with the recent rains. This water is used to water the drought tolerant plants. Despite all this, my water bill jumped to $12.44. I can’t wait for my next bill to see if it continues to jump upwards.

  • It is unfortunate that Mr. Kramer is unable to determine who filed the lawsuit. The lawsuit was filed by the Capistrano Taxpayors Association, not John Perry. The CTA was comprised of approximately 100 individuals, not just one individual. The City (yes, Mr. Kramer you voted on the water rates) had no legal right to illegally charge the residents those water rates. These are residents who had their water shut off because they could not afford the illegal water rates that were charged by the City. If you think the City was prudent in its spending, the why was the City Manager Joe Tait paid $324,000.00 a year to govern a City of 37,000. That is almost the same amount that the President of the United States earns. But, you had not problem paying Mr. Tait those funds did you Mr. Kramer ? You were on the City Council at the time Mr. Kramer and voted each and every time to fight the water lawsuit. As for attorney fees Mr. Kramer, please tell us exactly how much the attorneys the City hired reduced their fees by for representing the City and losing the lawsuit ? Keep in mind Mr. Kramer, after the CTA attorneys won the lawsuit at the Superior Court level, you did not pay the CTA attorneys. The CTA attorneys were under no obligation to reduce their fees as they earned them. Just out of curiosity Mr. Kramer, do you ask for a fee reduction when you go to Mcdonalds ? Or, do you pay the money that is owed ?

    The City could have avoided all of this just by setting legal water rates. Shame on you and the City for not doing so and then not returning 100 percent of the money you stole from the residents Mr. Kramer. You should be very embarrassed. Are you not the same Larry Kramer that held illegal secret meetings behind closed doors to ban newspapers ? Why don’t you pay to the residents the $70.000.00 it cost the City in attorney fees for your illegal act. When do the illegal acts ever stop with you Larry Kramer ?

    • I do not normally respond to comments because they go on forever & rarely accomplish anything. However, I would like to set the record straight on a couple of points.

      The water rates you refer to were set by a previous City Council using an outside consultant Black & Veatch. My discussions with members of that council lead me to believe they believed they were setting proper rates. The court subsequently decided otherwise.

      While I was on the council we initiated a new rate study & implemented the rates which are in effect today. No one has challenged them as being illegal. Of note the current Mayor voted against either initiating that study &
      Implementing the current rates.

      With respect to Mr. Tait we ended his contract shortly after being elected to the council.

      I am aware there are more members of CCS than John Perry. However he is the most prominant one regarding the rate lawsuit. I believe he has been quoted extensively about it & claimed to have done of the groundwork for it.

      Larry Kramer

      • Mr. Kramer, i understand you feel it is frustrating by responding and listening to people (by the way this sentence you wrote is absolutely GOLDEN !) and frankly, that is part of the problem. Yes, Larry Kramer that was you who voted during your term to change the water rates yet again. What do you say Mr. Kramer to the poor families who had their water turned off because they could not afford the illegal water rates ? You voted each and every step of the way to fight the water lawsuit. Yourself and Sam Allevato stated in public that the court had made a mistake. As we all know, despite your efforts of spending over two million dollars fighting this lawsuit, you were dead wrong. By the way Mr. Kramer, please explain the discount that was received from the six attorneys the City hired to lose this case. The fact is, there was no discount. You paid full pop to each and every attorney the City hired to defend your case.

        Your leadership while in the City Council, pumped the underground aquifer under our City dry to below sea level ! This in turn caused salt water intrusion into the ground water supply which then forced the San Juan Basin Authority to order the City to stop pumping water out of the ground. As a San Juan Basin Authority member Mr. Kramer, did you not read the reports that the basin was going dry ? Did you not read the letters from the San Juan Hills Golf Course, who has senior water rights to the City water, that their wells were going dry ? At no time Mr. Kramer did you ever recognize that there was a problem and continued to pump the region out of water. It took millions of years to fill the San Juan Basin with water and with your leadership, you managed to pump it dry ! Please, don’t tell me Mr. Kramer about a record drought, you could have pumped less water and saved the San Juan Basin from contamination. But you made a decision not to Mr. Kramer, spoiling the Basin for many generations.

        Again Mr. Kramer, it was over 100 residents who contributed their hard earned money to file the lawsuit over the illegal water rates. It is always helpful when you get your facts correct, but that is an issue that seems to elude you frequently.

      • Mr. Worthington, did the “over 100 residents” who contributed financially to the lawsuit get their money back when the city gifted $800,000 to the attorneys before a judge even said that was appropriate?

      • The City agreed to settle the lawsuit after it lost at the Appeals Court. Hindsight being 20/20 that was the correct decision to make as when the State Attorney General, Kamala Harris took the case to the California Supreme Court to unpublished the decision by the Appellate Court, it was denied by the California Supreme Court. So, let me ask you this, was it best to settle the case and pay the legal fees that were owed, or taking the case to the California Supreme Court paying another million dollars to the CTA attorneys and paying the city attorneys another at least 1.5 million dollars to try the case ? Again, hindsight being 20/20 it was the best decision to settle the case, pay the attorney fees as the State Attorney General lost in her own Supreme Court as the City would have also.

  • I’m sure Costco is enjoying its $12,000. water refund.

    • As they should. In fact, it should be two to three times more than that. Costco must have agreed to not sue the City for the other years that they were illegally charged for water.

    • Sounds like you are an old council crony. Don’t you think you should attribute that item to the council who proceeded illegally? The trial court and the appellate court did. Why call out the whistle blower who turned out to be 100% right?

  • Mr. Worthington must have missed the council meeting when Mr. Perry told Mr. Allevato he filed the lawsuit. His words were to the effect, if you’d listened to me, I would have had to sue you. And I won.

    But sure, it was a “group.”

  • The lawsuit was filed by the Capistrano Taxpayers Association.

  • The title to your guest column states in part “the long term effects”. Are you not the same Larry Jramer that voted for those stupid traffic signals at the Del Obispo railroad crossing as a Traffic Commissioner ? These traffic signals were not required by the FRA or the PUC, but you voted for them. What are the long term effects Mr. Kramer of those traffic signals being activated as many as 287 times a day when there is no train present ? What do you think your actions did to the quality of life for people who live on the wrong side of the railroad crossing ?

    The residents continue to deal with, and work to undo your poor, poor decisions that effect all of the residents.

  • How dare you Mr. Kramer? In conjunction with your cohorts on that council it was YOU who put in motion an illegal scheme to pursue an ill-conceived plan that became a spectacular failure and scourge in the community (excessive costs to the tax paying consumers by a factor of nearly 3 times, lowered the water table, wreaked havoc on the environment, killed trees and vegetation, and we do not have the reserve capacity we need in a drought after all, etc.) and in the process set in motion a chain of events that led to a lawsuit which the City LOST at trial, and an appeal that the City LOST, and a rate refund to address your dopey plan. Not to mention an expensive water plant that the community does not need and cannot afford and does not address the need it was supposed to address to begin with. You were warned many times over, and still proceeded down an illegal path. And now YOU have the temerity to blame the law abiding folks who had to work hard and spend money to bring it to a Court’s attention just to make you and your cohorts on council follow the law. What arrogance! An apology would be more in order than blaming the whistle blower. Folks with a brain that have been following this debacle know you are a laughing stock. Please zip your ever spewing silly pie hole Captain Ahab, forget about the white whale and just move on.

  • Perry and Worthington are heros. Despite many dificulties they overcame intense pressure and shined the light of truth on an illegal scheme. The trial court and an appellate court agreed. Kramer is part of the illegal scheme contingent. Sad to see he is still attacking others for his own failing.

  • I would like to see the pumping of our sacred under ground water stopped.I would like it pumped for our agricultural needs only,bring back my dead orange grove I cared about and the council let it die.I hope our new mayor will keep as much farming in my town as possible,we could grow our own veggies,and I could of been a care taker of the last open land we have here.remember how Beautiful those north east open space land was.

  • wow I am blown away such a whiney letter since you broke the law that the citizens of California voted into place. It was illegal and you disobeyed the law. Since you singled out John Perry dont you think its only fair and just you print all the names of each and every resident in SJC too? It was an illegal scheme and you and your cohorts got caught. So neener neener ya windbag.

comments (18)

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>