Mesa Water District approves 5-year rate increases over customers’ objections

Mesa Water District board members voted unanimously Thursday night to raise water rates by as much as 5% a year for the next five years, despite objections from some customers who implored the agency to find ways to tighten its belt before asking residents to pay more.

Under the adopted increases, the usage charge for potable water will rise from $3.62 per unit — equal to 748 gallons — to $3.86 next year.

The levy would rise by up to 5% annually in subsequent years, topping out at a maximum of $4.72 per unit by 2022.

The cost of recycled water also will go up, from $1.82 per unit now to as much as $3.08 in 2022.

Customers also will see increases in the fixed charges they pay for their water meters. Those vary depending on the size of the meter, but typical residential ratepayers will see their bimonthly payments rise from the current $23 to about $30 in five years.

The primary factor behind the increases, Mesa Water officials said, is that the district is seeing large rate hikes of its own from the Orange County Water District.

Like other water agencies in the county, Mesa Water pays an assessment to OCWD to pump groundwater. The “pump tax” — as Mesa Water General Manager Paul Shoenberger described it — was set at $294 per acre-foot in 2015 but is forecast to reach $625 by 2023.

“What a lot of people don’t understand is that we have to pay to get that water, so that is a cost to us,” Shoenberger said. “We don’t get it for free.”

The district also is seeing increases in the price it pays for recycled water — from $376.80 per acre-foot in 2015 to $738 next year.

Shoenberger said water supply costs account for roughly 30% of Mesa Water’s annual expenses.

“It’s a more than doubling of our largest cost,” he said. “That’s a bill that comes due us that we have to pay if we’re going to have the water to provide to our public.”

Another factor, he said, is that the district anticipates water consumption will be 10% below pre-drought levels as a result of continued conservation efforts. That means less revenue flowing in.

However, many of the approximately 40 people who attended Thursday’s rate hearing said they think the district should look to trim the fat from its budget before passing more costs on to customers.

Several pointed out that Mesa Water board members voted 3-2 earlier this year to boost their own pay by 10%, to $264 per meeting. Board President Jim Atkinson and former board member Ethan Temianka opposed the increase.

“It’s inappropriate and insulting to raise your own pay while you’re asking ratepayers to dig deeper into [our] pockets,” said Costa Mesa resident Robin Leffler. “We’re going to feel a pinch and you’re going to get a financial boost.”

Some customers lamented that they’re faced with a rate increase even after cutting their water use during the drought. Others said they feel the district has overspent on branding, communications and lobbying efforts and that the compensation for some high-ranking employees is out of whack with other areas in the county.

“People are saying ‘Tighten your belts’ — I don’t think you have a belt on at all,” Costa Mesa resident Ann Parker told the board.

Mesa Water board members, though, touted the steps the district has taken to firm up its finances and save money wherever possible.

The district recently refinanced $21.6 million worth of bond debt — taking advantage of its “AAA” credit rating to receive a lower interest rate — and established a pension trust to help eliminate its unfunded pension liability.

In recent years, Mesa Water also has reduced its workforce from 72 positions to about 58. Shoenberger said he plans to return to the board in the future with a proposal to cut an additional three positions.

Board member James Fisler characterized Mesa Water as the most efficient water district in Orange County, pointing to figures showing its per-capita spending is lower than any other.

“We now have something beyond our control, and that is the cost of the water that we pump,” Fisler said. “We cannot absorb that on top of this 10% net loss in revenue.”

Board Vice President Fred Bockmiller said the district could lower the planned increases in coming years if the financial situation pencils out.

luke.money@latimes.com

Twitter @LukeMMoney

Copyright © 2017, Daily Pilot
EDITION: California | U.S. & World
62°