MWD Approves 14% Hike In Rates For Imported Water

The Effects Of The Increase, Which Takes Effect Jan. 1, On Southern California Household Bills Will Vary Broadly.​
Los Angeles Times – By Deborah Schoch
The Metropolitan Water District board on Tuesday approved a 14.3% increase in the 2009 rates it will charge for imported water, a hike that will vary widely in the dollars it adds to Southern California household water bills.
The increase is a harsh reminder of water shortages caused by dry weather in California, drought in the Rockies and a court ruling hundreds of miles away, board members said.
Some members argued unsuccessfully that rates should rise 20%, an increase that would reflect the full cost of importing water. Next year, the MWD will take $166 million from already low reserves to balance the budget, officials said.

The 14.3% increase will go into effect Jan. 1, 2009, and rates are expected to rise again substantially in 2010 and 2011, they said. The board’s largest voting blocs — representing Los Angeles, San Diego and the Municipal Water District of Orange County — all supported the rate increase.

Board Chairman Timothy F. Brick said in a statement after the meeting that the MWD must work with its 26 member cities and agencies to manage rising costs, including through “more aggressive water conservation.” Some critics have said the MWD has not championed conservation to reduce imported water use and keep rates down.

The effect of the rate increase on 2009 residential bills will depend on how much imported water a customer’s city or water district buys from the MWD. Los Angeles residents will see an estimated boost of $3.31 a month for the average household as of July 1, 2009, if today’s increase is added to two rate hikes proposed by the L.A. Department of Water and Power.
The MWD increase will translate into a boost of about $2 a month in the bill of an average household in Santa Monica and $1.40 a month in Long Beach, not including any local rate increases, city officials said. The MWD estimates that the average household in the region will see a $1.50 monthly increase.

Officials in several cities, including San Diego and Beverly Hills, said they had not yet calculated the effect on local bills.

The rate increase will help fund the MWD’s budget for next year of $1.98 billion, a 7% increase from this year.

The rise reflects increased spending for more water purchases, higher power costs, debt service and efforts to stave off the spread of invasive quagga mussels discovered last year in some MWD pipes and reservoirs.

However, the rate increase does not provide for significant funds to help ease environmental problems in the Sacramento-San Joaquin River Delta. Those problems led to the court decision to protect the delta smelt by reducing water deliveries to the south. Nor does the rate hike cover the rise in labor costs anticipated to result from union contract negotiations that open next year. The agency’s labor costs amount to $260 million, or 13% of the total budget.

Some members warned that the public agency’s triple-A bond rating could be jeopardized by effectively using reserves to shield consumers from higher water bills.
“I just think it’s responsible to pay one’s bills and adopt a balanced budget,” said member Willard H. Murray Jr., who represents the Carson-based West Basin Municipal Water District. His motion for a 20% increase failed, garnering support from only seven of the 30 board members present.

​The 14.3% increase passed 183,695 to 0, with 10,595 abstentions, under the board’s weighted voting system. It allocates members’ votes by property valuation in the cities and water districts they represent.