MWD Adopts Unnecessary Rate Increases for 2015 and 2016

Overcollection Now Stands at $352 million

The Metropolitan Water District of Southern California on April 8 raised rates for 2015 and 2016 despite having projected cash reserves of $840 million –$352 million more than its board-adopted maximum reserve limit. MWD’s board also voted to spend the over-collected revenue on unbudgeted expenses.

Officials from the San Diego County Water Authority and several of its 24 member agencies attended Tuesday’s hearing in Los Angeles to defend the region’s ratepayers and urge no water rate increases be adopted. However, despite compelling information that rate increases are unneeded, the MWD board adopted 1.5 percent increases for each of the next two years.

The Water Authority’s delegates to MWD voted against the rate increases not only because they are unnecessary, but also because they are based on the same flawed methodology that a judge in San Francisco Superior Court recently ruled violates the California Constitution, the California Government Code and the common law.

MWD has amassed hundreds of millions of dollars in recent months because it under-estimated water sales and over-estimated its expenditures. Instead of using the resulting over-collected revenue to provide rate relief next year, the MWD voted to spend it on unbudgeted expenses and continue its long history of increasing rates.

MWD’s 2015 and 2016 rates were adopted Tuesday along with the agency’s $1.64 billion budget for fiscal 2015 and its $1.69 billion budget for fiscal 2016. The Water Authority will account for higher costs from MWD when developing its rates for the Water Authority Board’s consideration in June.

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