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Forty-eight years after a San Benito County Water District tax measure was passed, and after the federal loan the measure was authorized to repay has been repaid, confusion remains over whether the tax has an end date, resulting in multiple San Benito County Civil Grand Jury investigations.
Even the latest Civil Grand Jury report says the 1977 tax measure known as Prop. B “is open to many interpretations.”
According to the 2024-25 grand jury’s interpretation, the measure has partially expired and it recommends the water district seek approval for a new measure by 2026. It also recommends the water district use accounting methods that identify charges separately for loan repayments and for operation and maintenance.
However, San Benito County Water District General Manager Dana Jacobson told BenitoLink the report mischaracterizes the issue.
“We don’t feel it’s a factual portrayal of what is going on,” he said.
He added that the water district is reviewing the report and will provide a response to it.
In its report released June 17, the grand jury makes six recommendations for how to potentially address the issue. They include that the San Benito County Water District stop collecting the tax and to seek voter approval for a new measure to fund ongoing operation and maintenance costs.
The Civil Grand Jury is convened annually and made up of 19 citizens who are sworn to serve as grand jurors and investigate the operations of local government departments and agencies.
The grand jury report notes that it was unable to locate the original ballot measure in which the water district sought voter approval to borrow $19.9 million to build a system to distribute imported water. Instead, the grand jury relied on a public notice published in the Hollister Freelance which states, in part, “Levy charges and taxes sufficient to operate and maintain said system and to re-pay said loan.”
This is the second consecutive year the grand jury has reviewed the measure’s language.
Among the findings in this year’s report, the grand jury suggests that the continuing collection of taxes is not included in the intention of the measure and that the 40-year repayment period clause “implies a sunset.”
The grand jury doesn’t specify when the 40-year repayment period began and ended.
The report states that though the repayment period is over and the loan has been paid off, the San Benito County counsel has indicated the only way to stop the tax is through a legal process.
“If a person(s) or group would like to spend the time and funds in doing so, then they may be successful, but there is no guarantee of removal,” the report states.
The grand jury also recommended that water district and county officials hire an independent law firm to provide an unbiased interpretation of the ballot measure.
The grand jury also found that the district has taken additional loans against the measure even though it did not authorise them. The grand jury also recommended the water district seek voter approval for additional loans.
Lastly, the grand jury recommended that the district conduct an audit of its budgets to identify the average costs of operating and maintaining the system.
The report notes that the water district and the county are required to respond to the findings and recommendations within 90 days.
In its 2023-24 report, the grand jury recommended adding language to the tax bill noting it was for ongoing operation and maintenance, and that was implemented, according to the county Board of Supervisors’ response to the report.
County supervisors and other elected officials have disagreed with the grand jury’s finding that the measure was supposed to end after the 40-year repayment period.
In their response to the 2023-24 grand jury report, the county Treasurer, Tax Collector and Public Administrator Melinda Casillas said the measure does not have an end date, and county Auditor-Controller Joe Paul Gonzalez referred to the legal opinion of the water district, which reached the same conclusion.
Both offices said they have received complaints and inquiries from residents thinking the measure had ended.
The water district was not listed as an agency required to respond to the 2023-24 report.
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