Metropolitan Water District of Southern California, Water Planning and Stewardship Committee October 10, 2016

Transcript of interaction between San Diego County Water Authority Director and MWD

Director Lewinger:  Thank you Mr. Chairman.  Roger I’m glad to hear that we finally might be hearing some proposals from both between the Federal and State contractors and among the State contractors.  Mr. Chairman, the public speaker from the Water Watch today, spoke at today’s committee, is absolutely right about the fact that the time to talk about how WaterFix cost will be allocated here at the MWD, among our member agencies is long overdue.  Director Dake did make a request at the April Board retreat, six months ago, and a number of other directors have requested this subject be placed on the Board agenda for discussion on more than one occasion over the past several months since then, including requests at Water Planning, Bay-Delta, and Executive Committee, and yet nothing has happened.

So I’m gonna make a formal motion now that staff be directed to place on the November Board agenda a detailed staff report and recommendation for Board discussion of how WaterFix costs are planned by staff to be allocated among member agencies of MWD, including any existing or new water rates and charges, any property tax component, and any alternative fixed cost recovery charges, under the MWD act.

Director Steiner: Second.

Committee Chairman De Jesus (1:21:07):  So we gonna hold that for future agenda.

Lewinger: Chairman, it’s been moved and seconded.

De Jesus: That, it’s not on the agenda, for any action; so you are out of order.

Lewinger:  Mr. Chairman, there’s an item on the agenda, the Bay-Delta matters, this is directly applicable to the WaterFix.  I am making a motion that is item be placed on the agenda for next month and it’s been seconded.

De Jesus:  I’m going to have to refer to legal counsel as to whether or not that’s even appropriate.

Legal Counsel:  There is not an action item proposed on the agenda.

De Jesus:  That’s what I thought.

Lewinger:  Mr. Chairman, that’s bullshit.

De Jesus:  And I’ll quote you on that.

~Background voices/laughter~

De Jesus:  We’ll consider that for future agenda item.

Water Authority Delegates’ Letter to MWD regarding budget and rates

[raw]
[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
[clear]
[/raw]

[raw]
[one_half]Water Authority Delegates’ Letter to MWD regarding budget and rates (February 22, 2016) [/one_half]
[one_half last] [/one_half]
[clear]
[/raw]

Letter Library, Part 2 (Finance – long range plan/long-term willingness to pay)

Correspondence between MWD and Water Authority by Key Issue

Finance: Long Range Finance Plan

[raw]
[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
[clear]
[/raw]

[raw]
[one_half]Draft Long Range Finance Plan (January 5, 2011) [/one_half]
[one_half last] [/one_half]
[clear]
[/raw]

[raw]
[one_half]Update on Rate Refinement Discussions (July 9, 2012) [/one_half]
[one_half last] [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Rate Refinement Workshop (August 16, 2012) [/one_half]
[one_half last]MWD’s response to Water Authority’s August 16, 2012 Rate Refinement Letter (September 7, 2012) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Re: Update on “Rate Refinement” Board Information Item 7-b (September 10, 2012) [/one_half]
[one_half last]
[/one_half]

[clear]
[/raw]

 

[divider style=”dashed”]

Finance: MWD Member Agencies’ Unwillingness to Sign Contracts

[raw]
[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
[clear]
[/raw]

[raw]
[one_half]Member Agency Unwillingness to Sign Take-or-Pay Contracts (August 16, 2011) [/one_half]
[one_half last]
[/one_half]

[clear]
[/raw]

[divider style=”dashed”]

Letter Library, Part 1 (Official Statements/Sale of Bonds)

Correspondence between MWD and Water Authority by Key Issue

Official Statements/Sale of Bonds  [raw]
[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
[clear]
[/raw]

[raw]
[one_half]Water Authority’s Official Statement on Appendix A (September 22, 2010) [/one_half]
[one_half last]MWD’s Response to Water Authority’s September 22 Official Statement (September 23, 2010) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Water Authority’s Official Statement on Appendix A of MWD’s Draft Official Statement (December 9, 2010) [/one_half]
[one_half last]MWD’s response to the Water Authority’s December 9 Official Statement on MWD’s Appendix A (December 13, 2010) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Draft May Official Statement (May 16, 2011) [/one_half]
[one_half last]MWD’s Response to Water Authority’s May 16 Official Statement (May 24, 2011) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Draft Official Statement (August 22, 2011) [/one_half]
[one_half last]Director Foley’s Response to Water Authority’s August 22 Draft Official Statement (September 8, 2011) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Draft Remarketing Statement (February 13, 2012) [/one_half]
[one_half last]MWD’s Response to Water Authority’s February 13 Draft Remarketing Statement (February 14, 2012) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Re: Board Memo 8-2: Authorize the execution and distribution on the Official Statement in connection with the issuance of the Water Revenue Refunding Bonds (April 9, 2012) [/one_half]
[one_half last] [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Re: Agenda Item 8-8: Authorize the execution and distribution of Official Statements in connection with issuance of the Water Revenue Refunding Bonds (June 11, 2012) [/one_half]
[one_half last] [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Re: Board Memo : Authorize the execution and distribution of an Official Statement for potential refunding of Water Revenue Bonds (August 20, 2012) [/one_half]
[one_half last]MWD’s Response to Water Authority’s August 20, 2012 Letter re: Comments on Appendix A (September 4, 2012) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Re: MWD’s review of Water Authority’s August 20, 2012 comments on Appendix A (August 29, 2012) [/one_half]
[one_half last] [/one_half]
[clear]
[/raw]

 

Letter Library, Part 3 (Finance – budget and water rates/audit practice/annexation, Resources Planning, Subsidy Programs, QSA, Other)

Correspondence between MWD and Water Authority by Key Issue

Finance: Budget and Water Rates

[raw]
[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
[clear]
[/raw]

[raw]

[clear][/raw]

[raw]
[one_half]Proposed Biennial Budget for 2011/12 and 2012/13 (April 11, 2011) [/one_half]
[one_half last] [/one_half]
[clear]
[/raw]

 

[clear]
[/raw]

 

[raw]
[one_half] [/one_half]

 

 

[raw]
[one_half]Proposed Biennial budget and Associated Rates and Charges for 2012/13 and 2013/14 (March 8, 2012) [/one_half]
[one_half last]  [/one_half]
[clear]
[/raw]

 

 

[raw]
[one_half]Recommendation to Cap MWD Rate Increases at 3% for 2013 and 2014 (March 21, 2012) [/one_half]
[one_half last] [/one_half]
[clear]
[/raw]

[divider style=”dashed”]

Finance: Audit Practice

[raw]
[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
[clear]
[/raw]

[raw]
[one_half]KPMG Audit Report (October 25, 2011) [/one_half]
[one_half last]Response to KPMG Audit Report (November 1, 2011) [/one_half]
[clear]
[/raw]

[divider style=”dashed”]

Finance: Water Authority Annexation

[raw]
[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
[clear]
[/raw]

[raw]
[one_half]San Diego County Water Authority’s Annexation (March 13, 2012) [/one_half]
[one_half last] [/one_half]
[clear]
[/raw]

[divider style=”dashed”]

Resources Planning including Integrated Resources Plan (“IRP”)

[raw]
[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
[clear]
[/raw]

[raw]
[one_half]Integrated Resources Plan (October 11, 2010) [/one_half]
[one_half last] [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Adjustments to MWD’s Water Supply Allocation Plan Formula (September 9, 2011) [/one_half]
[one_half last]  [/one_half]
[clear]
[/raw]

[raw]
[one_half]Water Planning and Stewardship Reports – lack of justifications to demonstrate needs and benefits (October 7, 2011) [/one_half]
[one_half last]  [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Water Authority’s Request to Include Information in MWD’s SB 60 (December 13, 2011) [/one_half]
[one_half last]MWD’s Letter on Request to Include Information in Report to Legislature (January 18, 2012) [/one_half]
[clear]
[/raw]

[divider style=”dashed”]

Subsidy Programs: Local Water Supply Projects

[raw]
[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
[clear]
[/raw]

[raw]
[one_half]MWD Local Resources Program – Chino Desalter (June 13, 2011) [/one_half]
[one_half last]Response to June 13, 2011, letter on Chino Basin Desalination Program (June 14, 2011) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Oppose Local Resources Program Agreements (March 12, 2012) [/one_half]
[one_half last] [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Oppose Local Resources Program Agreement with MWDOC and the City of San Clemente for the San Clemente Recycled Water System Expansion Project (June 11, 2012) [/one_half]
[one_half last] [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Oppose Local Resources Program Agreement with MWDOC and El Toro Water District for the El Toro Recycled Water System Expansion Project (August 20, 2012) [/one_half]
[one_half last] [/one_half]
[clear]
[/raw]

[divider style=”dashed”]

Subsidy Programs: Conservation

[raw]
[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
[clear]
[/raw]

[raw]
[one_half]Comment Letter on MWD Staff Analysis on Opt-in/Opt-out Conservation Program (August 16, 2010) [/one_half]
[one_half last]  [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]MWD Draft Long Term Conservation Plan (November 29, 2010) [/one_half]
[one_half last]  [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Comments on Long Term Conservation Plan Working Draft Version 11 (July 20, 2011) [/one_half]
[one_half last]  [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Opposition Letter on Long Term Conservation Plan and Revised Policy Principles on Water Conservation (August 15, 2011) [/one_half]
[one_half last]  [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Turf Replacement Grant (November 23, 2011) [/one_half]
[one_half last]  [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Oppose changes to water conservation incentives (subsidies) as described (May 7, 2012) [/one_half]
[one_half last]  [/one_half]
[clear]
[/raw]

[divider style=”dashed”]

Subsidy Programs: Replenishment

[raw]
[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
[clear]
[/raw]

[raw]
[one_half]MWD Discounted Water Program (April 25, 2011) [/one_half]
[one_half last]MWD’s Response to Water Authority’s April 25, 2011 Letter on Discounted Water (May 4, 2011) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Sale of Discounted Water (May 6, 2011) [/one_half]
[one_half last]  [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Comments and Questions – Replenishment Service Program (September 12, 2011) [/one_half]
[one_half last]  [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Letter on Approve Policy Principles for a Replenishment (Discounted Water) Program (November 4, 2011) [/one_half]
[one_half last]  [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Letter on Review Options for Updated Replenishment (Discounted Water) Program (December 12, 2011) [/one_half]
[one_half last]MWD’s Response to Water Authority’s December 12, 2011 letter on Replenishment Program (December 21, 2011) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Response letter to MWD Letters on Replenishment Dated December 21, 2011 (January 5, 2012) [/one_half]
[one_half last]MWD Response to January 5, 2012 Letter on Replenishment Workgroup Materials addressed to MWD Delegation (January 18, 2012) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]  [/one_half]
[one_half last]MWD’s Replenishment Workgroup Documentation Response Letter to SDCWA’s January 5, 2012 “MWD Letters on Replenishment dated December 21, 2011” addressed to Ken Weinberg (January 18, 2012) [/one_half]
[clear]
[/raw]

[divider style=”dashed”]

Quantification Settlement Agreement (“QSA”) including IID Water Transfer

[raw]
[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
[clear]
[/raw]

[raw]
[one_half]MWD Initiated this correspondence [/one_half]
[one_half last]Notice of Default Pursuant to Amended and Restated Exchange Agreement (April 12, 2012) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Request for Negotiation (April 26, 2012) [/one_half]
[one_half last]Response to April 26, 2012 SDCWA Letter re Request for Negotiation (May 4, 2012) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]MWD Initiated this correspondence [/one_half]
[one_half last]Notice of Default Pursuant to Amended and Restated Exchange Agreement (June 12, 2012) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Water Authority’s response to MWD’s June 12, 2012 Notice of Default (June 27, 2012) [/one_half]
[one_half last]Compliance with the Amended and Restated Exchange Agreement (August 1, 2012) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]IID Water Conservation and Related QSA Issues (July 10, 2012) [/one_half]
[one_half last]  [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]SDCWA’s response to MWD’s August 1, 2012 Letter (August 16, 2012) [/one_half]
[one_half last]  [/one_half]
[clear]
[/raw]

[divider style=”dashed”]

Other

[raw]
[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
[clear]
[/raw]

[raw]
[one_half]Water Authority’s letter to Los Angeles County Economic Development Corporation re LAEDC Draft Report on “Cost of Water in San Diego: the SDCWA-IID Water Transfer and SDCWA Water Rates” (March 8, 2012) [/one_half]
[one_half last]N/A –  Our letter was address to Los Angeles County Economic Development Corporation [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Re: Letter to U-T San Diego (March 28, 2012) [/one_half]
[one_half last]MWD’s Response to SDCWA’s March 28, 2012 Letter “Re: Letter to U-T San Diego” (April 19, 2012) [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Water Authority’s Response to MWD’s April 19, 2012 Letter to U-T San Diego (April 24, 2012) [/one_half]
[one_half last]NONE (but we had sent initial letter on 3/28/12, MWD responded 4/19/12, and then we responded 4/24/12 [/one_half]
[clear]
[/raw]

 

[raw]
[one_half]Re: Approve amendments to MWD Administrative Code (September 10, 2012) [/one_half]
[one_half last] [/one_half]
[clear]
[/raw]

[divider style=”dashed”]

Water Authority proposal caps MWD rate increases at 3% for two years

The San Diego County Water Authority is recommending the Metropolitan Water District of Southern California cap proposed rate increases for 2013 and 2014 to no more than 3 percent a year,  accomplished through a $116.5 million budget reduction over the next two years.

The recommended package of modest budget reductions and capped rate increases would preserve funding for critical regional water infrastructure maintenance and improvements, yet have much less impact on Southern California ratepayers than MWD’s current staff recommendation.  MWD’s current recommendation calls for a 7.5 percent rate hike in 2013 and another 5 percent hike in 2014.

The Water Authority recommendation calls for a 10 percent cut to operational expenses over the next two years, which would result in $76.5 million in savings.  The Water Authority’s proposal also recommends suspending conservation funding for the two-year budget cycle, which would save approximately $40 million.

“MWD’s water sales are down more than 30 percent —  it is simply not necessary to incentivize water conservation at this time,” Dennis Cushman, Water Authority Assistant General Manager said.  “We understand offering rebates is popular, but higher water rates, and a growing water conservation ethic are also are driving greater water use efficiency without impacting ratepayers.  It’s not logical or fair at this time to continue to ask ratepayers to continue to subsidize the cost of providing incentives on water-saving devices.”

The Water Authority’s proposal keeps funding intact for crucial maintenance of the Colorado River Aqueduct and other critical investments in regional infrastructure – needed spending that makes up only a small fraction of MWD’s budget.    MWD has claimed its proposed rate hikes are needed to ensure repair and replacement of aging infrastructure.  In reality, the current budget  recommended by MWD staff actually increases funding for travel expenses, staffing levels and consulting services.

“MWD’s staff recommendation is inconsistent with MWD’s lowered water sales and revenue trends, and is out of step with cities and other public water suppliers who have been forced to make difficult decisions to reduce expenditures as a result of declining revenues,” said Cushman said.  “The Water Authority’s  recommended approach is a sensible and responsible way to proceed for Southern California’s ratepayers and for MWD.  We hope MWD’s Board will seriously consider this proposal on April 9 and 10 when it considers adopting MWD’s 2013 and 2014 budget and rates.”

To read the Water Authority’s full proposal, click here

Click Speak Now to send your message to MWD’s Board of Directors about capping rate increases.
[button link=”http://www.mwdfacts.com/speak-out” color=”red” target=”_self” size=”medium” title=”I Want to Send a Message”]SPEAK NOW[/button]

MWD’s board is planning to raise your water rates on April 10

Board votes down motion to cut spending to reduce water rate increases.

 A day after hearing heartfelt testimony from several dozen speakers from the San Diego region, the Metropolitan Water District of Southern California Board of Directors voted to follow its own Administrative Code and vote on adoption of its next two-year budget and rate increases in April.  The recommended budget includes two more years of rate increases, “averaging” 7.5 percent for 2013 and another 5 percent in 2014.Following the board’s decision to keep the budget rate adoption in April, the Water Authority made a motion requesting that staff return to the Board with budget reductions that lower the proposed water rate increases. That motion failed. Click here to see how your region’s MWD representative voted.

“This is a particularly disappointing vote, considering the testimony of so many people at yesterday’s public hearing who asked MWD to go back and take another crack at cutting expenses before it raises rates again,” Michael T. Hogan, chair of the San Diego County Water Authority Board of Directors, said.

On March 12, after listening to dozens of concerned residents, elected officials and water officials from around San Diego County protest MWD’s bloated budget, continual rate increases and illegal rate structure, MWD’s Finance and Insurance Committee recommended the MWD Board consider adoption of its 2013 and 2014 budget and rates in April. MWD’s full Board approved the committee’s recommendation on March 13.
“MWD’s Board heard loud and clear our region’s opposition to the proposed rate increases, and its intention to set rates in a manner that ignored public input,” Hogan said.
“We will continue to push for rate and budget reforms at MWD.  The Water Authority, which provides 25 percent of MWD’s revenues, has the largest financial stake in ensuring that MWD’s rates and budget are legal, and that the agency itself is fiscally sustainable,” Hogan said.  The Water Authority is the largest member agency of MWD, which serves more than half of California’s population in a service area with a gross domestic product of greater than $1 trillion.

YOU STILL HAVE THE CHANCE TO TELL MWD NOT TO RAISE RATES!

WHAT’S WRONG WITH MWD’s PROPOSED WATER RATES HIKES?

      • MWD’s full service rates have increased 75% since 2006.
      • MWD is recommending additional rate increases for 2013 and 2014 that will bring the total rate increases to 101% since 2006.
      • MWD’s rate increases might not be necessary if MWD would cut expenses to better match sales revenues.

MWD has failed to adjust its budget to meet changed circumstances, including lower water sales.

      • MWD‘s water sales are going down. Due to past board decisions, a significant amount of MWD revenue is generated by water sales – and MWD’s water sales have decreased by more than 500,000 acre-feet since 2008 – about 30%. But MWD has failed to grapple with this reality or recognize that shrinking water sales means shrinking revenues.
      • MWD’s spending is going up. MWD’s proposed budget will balloon to $1.9 billion in FY 2013/14 – a 16% jump from its current budget. Unlike cities and other public agencies across Southern California, MWD has failed to “right size” its budget to reflect current economic realities or reduced demand for MWD water. Instead, MWD is still budgeting and spending money as if it were selling as much water as it did in the past.
      • MWD has a flawed water supply plan. In spite of its reduced water sales, MWD is still planning to spend billions of dollars to develop new water supplies far beyond forecasted needs.  MWD’s budget continues to include even more subsidies for local supply development projects that will further reduce MWD’s water sales and revenues. During the March 13 Board meeting, six new water subsidy agreements were approved, including four with the Los Angeles Department of Water and Power.
      • MWD’s financial projections have been so wrong over the past five years that its financial reserves are being depleted. Facing rising costs and falling revenues, MWD is depleting its reserves rather than adopting a realistic budget based on reasonable sales projections. If the present trends continue, over the next several years, MWD water rates will continue to skyrocket.

ABOUT MWD’s PROPOSED WATER RATES AND BUDGET

MWD’s recommendation is to raise water rates by 7.5% in 2013 and 5% in 2014 (these are average water rates – the actual impact on your water rates could be higher than the average).  If approved by the MWD board in April, MWD’s full service water rates will have increased by more than 100% over just nine years, from 2006 to 2014.

Find MWD’s proposed biennial budget and associated water rate increases here.

The Water Authority has urged MWD to reduce its expenditures to better meet its financial obligations and manage water rates.

Read the Water Authority’s comments on the MWD’s proposed budget and associated water rate increases here.

 

Since 2006, MWD rates have increased by 75%, and if the MWD board approves the recommended increases for 2013 and 2014 in March, MWD rates would have increased since 2006 by 101%.