NEWPORT BEACH : Water Rate Increase Gets Preliminary OK

The City Council has preliminarily approved a water rate increase of 13 cents per 100 cubic feet to offset a 14% jump in Metropolitan Water District rates and reduced supplies.

If passed again on its second reading, the increase would boost city customers’ rates from $1.05 per 100 cubic feet--or 750 gallons--of water to $1.13. However, consumers who drop their water use by 20% would see their rates drop from $37.60 for 1,600 cubic feet of water to $34.68.

The council also approved a 42-cent surcharge on water bills to offset charges passed on to the city from the state and county health departments and the Coastal Municipal Water District.

The 13-cent increase was suggested by the Metropolitan Water District, which will begin charging another $32 per acre-foot of water on July 1.

That combined with the reduction in supplies would have boosted the rate to $1.24 per 100 cubic feet.

The rate increase will have its second reading next month.

If passed then, the city’s Utilities Committee will review the new rates in January, 1992.

Without the price increase and reduced supplies, customers could have expected water rates to drop to $1.01 per 100 cubic feet.

The council also gave preliminary approval last week to a proposal to use a $500,000 surplus from the city’s water fund to help hold down the rate increase.

Councilman John Hedges said the transfer from the reserve fund keeps the cost of water at an “artificially low” price and sends the wrong message to customers.

Hedges said in a statement that the transfer would amount to “a government-subsidized price” and suggested that the money be diverted to conservation efforts.

“Basic economics suggest that an increase in the price of commodity will encourage its conservation,” Hedges said. “Conversely, that commodity which has its price kept artificially low will be more likely to be squandered.”

Despite his protests, Hedges joined five other council members in passing the proposed ordinance. Councilwoman Jean H. Watt was absent.

Hedges said that he may still vote against the ordinance but that he “needs more support” from other council members in opposition.