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.
YOU STILL HAVE THE CHANCE TO TELL MWD NOT TO RAISE RATES!
Where to go to speak out against MWD’s rate increases:
Tuesday, April 10, 2012, Noon
MWD Board Room, 700 North Alameda St., Los Angeles, CA 90012
(adjacent to Union Station, click for directions)
Click Speak Now to send your message to MWD’s Board of Directors.
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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.
The Water Authority has urged MWD to reduce its expenditures to better meet its financial obligations and manage water rates.