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

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