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%.