Mesa Water takes another step toward increasing rates up to 5% a year for 5 years
Mesa Water District board members took another step toward possible rate increases Thursday, unanimously approving the amount and timetable of the sought-after increases and officially scheduling when to vote on them.
As proposed, district customers could see their rates go up by as much as 5% a year for the next five years.
Ratepayers would see increases both in the cost of the amount of water they use and the fixed charges they pay for their meters, according to a rate study the board reviewed Thursday.
The usage charge for potable water would increase from the current $3.62 per unit — equal to 748 gallons — to $3.86 next year. It would rise steadily from there, reaching $4.72 by 2022.
For recycled water, the cost would go up from $1.82 a unit to a maximum of $3.08 in 2022.
Meter charges would vary depending on the size of the meter. However, a typical ratepayer would see the bimonthly payment rise from $23 now to about $30 in five years.
A decision on the proposed rate increases is expected at a public hearing Nov. 9.
Mesa Water officials say the hikes are necessary to offset recent and anticipated increases in the cost of water, as well as decreased sales resulting from conservation efforts that began during the recent drought.
“We’re in a position where we actually have to buy the commodity to deliver to the residents, and we have to have the money to be able to buy the water to deliver,” board member James Fisler said Thursday.
General Manager Paul Shoenberger said water supply costs account for about 30% of the district’s annual expenses.
When those increase substantially — as has happened recently and is expected to continue in the near term, he said — it has a major effect on the district’s finances.
The price Mesa Water pays for recycled water, for instance, is set to increase from the current $478.40 per acre-foot to $738 next year, according to district figures.
Also going up is the assessment Mesa Water pays to the Orange County Water District to pump groundwater.
That was set at $294 per acre-foot in 2015 but is expected to rise to $445 next year and $625 by 2023, district figures show.
“This is something that’s impacting all agencies in Orange County that pump groundwater, so Mesa Water is not the only agency that is having to bear this,” Shoenberger said.
Mesa Water officials have said the proposed rate increases are designed to maintain the district’s practice of having about 80% of its revenue come from usage charges.
During the drought, Shoenberger said, Mesa Water saw significant reductions in revenue as customers tightened their taps to help the district meet its state-assigned water conservation target, which was set as high as 20%.
“That big drop in water use does come with a similar big drop in revenue,” he said. “It was … our strong financial position at the beginning of the drought that helped us make it through without having to ask [customers] to conserve and raise the rates at the same time, but financial situations are catching up with us.”
It’s also important, board members and staff said, to make sure the district has enough money coming in to pay for necessary infrastructure work — including $36 million in capital projects scheduled over the next five years — and to keep its reserves healthy.
Later this month, Mesa Water will send out official notices advising ratepayers of the proposed increases.
The district also will advertise the adjustments on its social media accounts and insert notifications in customers’ bills.
“We’re really trying to get the word out and we are trying to get as much input from the public as possible,” Shoenberger said.
Mesa Water provides service to about 110,000 people in Costa Mesa, parts of Newport Beach and sections of unincorporated Orange County, including John Wayne Airport.
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