How Obamacare repeals would affect some Californians

Good morning. Happy Monday. It seems like both the country and state are in a holding pattern until January when Trump will be sworn in, a new Congress starts and the California legislative session begins. 

Democrats in the Legislature have made it clear in recent weeks that everyone should expect fights with the feds over immigration, while Republicans in D.C. are prioritizing an Obamacare repeal. But details are sketchy. 

One thing is for sure: Even though Republicans have taken control of D.C. on an anti-Obamacare platform, there could still be many upset people, depending on how the replacement system is structured. 

In fact, Bakersfield.com/Kaiser Health News talked to some of those upset people in the Bakersfield district of House Majority Leader Kevin McCarthy. But no matter what happens, there will be people both upset and pleased. 

In other news:

• Fate of the CA GOP: “Many say the party needs to soften its posture on undocumented immigrants and social issues in order to attract more Latino, Asian and young voters. Others, particularly in the GOP’s traditional voter base, counter that Trump’s victory nationwide is proof that a stronger stance is called for. At stake is the very relevance of the Republican Party in California.” The Orange County Register has more. 

• Mismanagement of a gov’t program?: “The Metropolitan Water District’s massive $340-million turf rebate program — which helped thousands of Southern Californians rip out their lawns in favor of drought-tolerant landscaping — was plagued by poor planning and oversight by the agency, a new audit found.” The Los Angeles Times has more. 

• Racial profiling: “Police officers in California will soon track the race of those they pull over for traffic stops or encounter in the street, according to proposed guidelines released Friday by Atty. Gen. Kamala Harris,” reports the Los Angeles Times. 

• Drought: “October was wet, November dry. And December? The soft but steady rains this weekend were enough to push the Sacramento region to 155 percent of normal precipitation for the season. … And there’s more to come. … So what does that mean for California’s drought, now entering a sixth year? While Northern California has seen a wet start to winter, the situation is more complicated across the state. Central and Southern California continue to experience unusually dry conditions. And even in the north state, it’s not clear how the rest of the rainy season will shape up.” The Sacramento Bee has more. 

Legislature:

• Gone till January. 

Gov. Brown:

• No public events announced. 

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Remember Proposition 26, the Stop Hidden Taxes Initiative, passed by 52.5 percent of California’s voters in 2010?  Probably no one who voted at that time had any idea Prop. 26 would help resolve — at least for now — the 68-year water rate battle between the San Diego County Water Authority and the Metropolitan Water District of Southern California.

SDCWA and MWD have been fighting a water war since 1946 over who has paramount water rights during droughts and how much SDCWA should pay for the transport of water through MWD’s aqueduct and pipeline system.

After 68 years of nearly perpetual water war, on April 24 San Francisco County Superior Court Judge Curtis E. Karnow issued a decision in the water rate battle of the war in favor of SDCWA.  The judge ruled that MWD had overcharged SDCWA in violation of the California Constitution, state water wheeling (transportation) laws and Prop. 26.

MWD is the wholesale water supplier to the Southern-most six urban counties in the state.  MWD built and operates the Colorado River Aqueduct and pays for most of the costs to operate the California Aqueduct that delivers water from Northern California.

(MWD is not identical to the Los Angeles Department of Water and Power that built the Los Angeles Aqueduct from Owens Valley.  MWD is so big that LADWP is just one of its member water agencies.)

If California’s water system were to be characterized as one big pipeline from Northern to Southern California, SDCWA would be at the very end of the line.  And since SDCWA had few groundwater basins due to its geology, it was also the largest urban county most dependent on imported water.

SDCWA lost water war before it started up

Historically, SDCWA was a latecomer to MWD’s current confederation of 26 cities and water district; it joined MWD in 1946. Two years earlier, in 1944, President Franklin D. Roosevelt had forced SDCWA to abandon its plans to use the gravity-fed All American Canal in favor of MWD’s costly Colorado River Aqueduct that had to pump water over Mojave Desert mountain chains.  Roosevelt’s main interest was to supply water to Navy bases in SDCWA during World War II.

SDCWA has always agonized over whether the original 13 cities that formed MWD could exert preferential rights to water over SDCWA, leaving it dry in a drought.  MWD’s Laguna Declaration of 1952 stated it would supply all the water all member agencies needed at any one time, either in wet or dry years.  Nevertheless, in 1991 SDCWA’s share of MWD water was reduced by 31 percent in a drought.

Even though SDCWA is MWD’s biggest water customer, it has never had enough political clout on MWD’s Board of Directors to undo what it has long considered an unfair arrangement. According to an email from spokesman Mike Lee, SDCWA buys on average about 25 percent of MWD’s water, but has only four votes on its 37-member board — or 11 percent of the votes.  The voting formula on MWD’s board is weighted based on assessed property values, not on what pays most of the bills.

From 1947 to the 1990’s, six pipelines were built branching off from MWD’s Colorado River Aqueduct, then stretching some 70 miles to San Diego.  The U.S. Navy built most of the lines, but MWD operated them.  The only user of these pipelines was SDCWA.  Yet, SDCWA was charged a “water wheeling” (transportation) fee over MWD’s entire grid of 800 miles of pipelines across nearly all of Southern California.

Back in 2000, MWD prevailed in court in a water-wheeling rate case against SDCWA. SDCWA argued that wheeling fees should be charged on a point-to-point basis. But the Appeals court ruled that MWD was entitled to recover its full system costs.

MWD ended up counter-suing SDCWA, Imperial County, private water developer Cadiz Inc., and some Indian tribes to validate the Appeals court’s decision.

Along came Proposition 26

Then in 2010, along came Prop. 26, which only applied to fees imposed after Nov. 3, 2010, the date of the election. The provisions of Prop. 26 required that fees must be based on the actual costs of a particular government service, not full system costs. Prop. 26 reclassified regulatory fees as a taxes requiring a two-thirds vote of local voters consistent with prior Props. 13 and 218.

Prop. 26 re-opened the spillway to the longstanding water rate dispute between SDCWA and MWD.  MWD insisted that its water-rate structure is legal and is reportedly in the process of appealing Judge Karnow’s decision to a higher court.  However, unlike MWD and SDCWA’s 2000 water-rate court case, for the current case an appeals court would have to overcome the “will of the electorate” expressed in Prop. 26.

This is a good example of how water cases commonly last decades in the courts, and in some cases never really end.

But so far, at least, Prop. 26 is a taxpayer-built dam to hold back a flood of taxes.

                                     Contributions for and Against Prop. 26 in 2010 

The first is the fact that many Golden State public agencies routinely act in ways that would yield criminal and civil legal action and shareholder lawsuits if the same shenanigans took place in the business world.

The second is that in special districts — exemplified by the Metropolitan Water District but seen in water, transit and other agencies around California — there is a disincentive for top officials to play tough in salary negotiations because they personally benefit from overly generous pay and compensation practices. If such practices lead to higher bills sent to ratepayers or to poorer services, so be it.

Take it away, Dan:

“… what the district calls ‘perhaps the most significant change agreed to by unions’ … amends a decades-old contract provision that required union approval before BART managers could alter past work practices.

“That provision has impeded attempts to improve technology, reduce paperwork and increase efficiencies. BART leaders made its elimination a top negotiation priority; they got an alteration instead. Nevertheless, they claim the new language will enable them to improve technology and switch equipment without union approval.

“In fact, changes must still be negotiated with the unions. Unresolved disputes will be subjected to binding arbitration. And the arbitrator may provide relief, including ‘additional compensation.’

“That means unions will demand, and likely receive, more money in exchange for modernization, thereby eroding cost-savings BART desperately needs.”

This part is particularly rich: The concession-that-didn’t-happen was treated as if it happened.

“BART officials cite the contract modification as a key reason for agreeing to the financial terms. But they also misrepresent the monetary aspects.

“For starters, they claim employees, already some of the best paid transit workers in the nation, will net a 9.4 percent increase over the four-year contract. That counts salary increases offset by increased contributions to pensions and health care. In fact, the net benefit to workers is 11.7 percent.”

Will BART bosses pay for their perfidy?

Wait, there’s much more — a list of BART’s financial deceptions:

“First, officials claim the deal will save $2.7 million due to retiree health care changes. New employees will now be required to work 15 years before vesting in the plan, rather than the current five years.

“But most of the savings will materialize decades from now. Nevertheless, BART calculated the savings for 30 years and then credited half of that during just the next four years, thereby grossly inflating the contract savings. It’s fictional accounting.

“Second, BART claims it will save $5 million by encouraging employees with spouses who have health coverage to opt out of the transit district’s insurance. Employees will be offered $350 a month to do so. The question is how many people will take the deal. BART estimates 150 employees will, but they really don’t know.

“Third, the district left a $16 million retirement item out of its accounting.”

“The transit system not only provides traditional pensions, it also funds retirement savings accounts similar to 401(k)s. The district currently contributes $1,869 per year. And until 1991 it also kicked in 1.627 percent of salary.”

So as bad a deal as it looked when it was first reported, it was actually far worse. Will top BART officials face any repercussions for their dishonesty and profligacy?

In a just world, of course. But not in California.