Mesa Water rate hikes, capital charge approved by directors

Mesa Water District in Costa Mesa.
Mesa Water District officials on Wednesday approved a five-year rate hike and a capital charge that will be added to property owners’ tax bills.
(File Photo)

Mesa Water District Board of Directors on Wednesday approved a five-year rate hike and a capital charge that will be added to property owners’ tax bills — steps officials say are needed to help maintain service reliability and cover rising costs.

The district, which services most of Costa Mesa and portions of Newport Beach and unincorporated Orange County, including John Wayne Airport, has embarked on a $70-million capital campaign that includes two new potable water wells and upgrades to reservoirs, pump stations and pipelines.

The adjustments — which will see average homeowner bills cumulatively increase roughly 35% by 2027 — will fund the improvement projects and allow the district to cover inflationary trends observed nationwide.

The additional revenue will also help pay a replenishment assessment, levied by Orange County Water District for purified groundwater, which officials say accounts for about one-third of the district’s expenditures.

The district on Wednesday will consider a rate increase that would take effect next year. But a proposal to add a capital charge onto ratepayers’ property tax bills doesn’t sit well with some.

“Their costs are rising, and they’re passing those through to us at about a 6.5% increase,” explained Board Vice President Shawn Dewane. “And we, as a government agency, are simply passing that cost back through to the customers who use the water utility.”

In addition to the rate increase, a new capital charge will soon appear on the property tax bills of customers who own parcels served by Mesa Water during the billing cycle covering January 2023.

District officials maintain the fee does not constitute a tax but is a reapportionment of fees previously paid through a customer’s water bill. They say the charge will create a stable revenue stream, rather than one that fluctuates according to seasons and use patterns.

Mesa General Manager Paul Shoenberger said it’s appropriate for property owners to be charged for infrastructure investments that enhance property values over time.

Funded by a $1.6-million grant from the state’s Department of Water Resources, two potable water wells under construction in Santa Ana should be completed by June 2022.

“We feel it is reasonable for the property owner … to invest and make sure long-term capital upgrades, maintenance, and the ability of that to function well, is maintained,” he said.

A handful of residents speaking in public comments claimed the proposals were too convoluted and that public notice, issued in November, and staff reports released in late December didn’t offer enough time for thorough review or provide adequate justification for the hikes.

“I’m very much aware that water costs … are escalating at much higher rates than the [Consumer Price Index],” said resident Andrew Barnes. “But Mesa Water has had a very financially prudent operation, and I just don’t see why our trend in capital costs needs to reflect the national average.”

Board members unanimously passed the rate increase schedule and the capital charge proposal in two separate votes.

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