MWD Fiction: MWD water rates and charges continue to increase, driven primarily by the need to maintain and repair important MWD water facilities such as the Colorado River Aqueduct.
FACT: The truth is that MWD has a spending problem. A business that experiences a sharp drop in sales or a cut to its income normally has to cut spending in order to balance the books and stay in business and pay its bills. The same is true for a household budget. Less money coming in means expenses need to be cut.
But MWD is avoiding making these difficult decisions. While its sales have dropped by 30%, its annual operating budget has steadily increased. Since 2006, MWD’s operating budget has grown from $290 million to $394 million (proposed for 2014), an increase of 36 percent.
But it gets worse. MWD has been spending more money than it has collected. Even with sharply higher water rates, MWD has not collected enough money to cover its expenses in six out of the last eight years. Which takes us back to the budget and water rates the MWD board will be voting on April 10.
What can MWD do to reduce spending and water rate increases in 2013 and 2014? Reduce its operations and maintenance budgets and suspend conservation subsidies for the next two years.
To read more about how MWD can cut its spending and reduce water rate increases, read this: Recommendation to MWD Board to Cap Rate Increases at 3%.
Stubborn things, facts are.
Check back for the next installment of MWD Fiction vs. Fact.