Water prices may rise this summer

Andrew Edwards

Water rates around Newport-Mesa will likely be hiked this summer.

Officials blamed state property-tax policies and low rainfall in

previous years for the likely rate increases.

So far, officials do not know the magnitude of the expected rate

hikes.

“We do not have a forecast right now; we’re still in the process

of putting our budget together,” said Diana Leach, general manager of

the Mesa Consolidated Water District.

Mesa Consolidated’s board is scheduled to begin budget discussions

at their May 24 meeting. Leach said her district’s expected rate

increase will be driven by an anticipated hike in the rates they pay

to the Orange County Water District.

The Orange County Water District is charged with administering the

county’s groundwater basin, and it supplies water to other agencies.

That district’s general manager, Virginia Grebbien, said the primary

driver behind her agency’s expected rate hike is the state’s

appropriation of property tax revenues from local governments.

“The major factor in the increase in our rates is the state stole

$7 1/2 million from us,” Grebbien said.

Grebbien said the state government will take $7.5 million over two

years from her agency, which typically receives $13 million in

property-tax revenues each year. The district needs to raise rates to

cover operating costs.

The state budget passed in 2004 claimed property taxes typically

allocated to local governments in an effort to fix California’s

budget hole.

Rain from this winter’s storms have not been sufficient to make up

for earlier dry years, Grebbien said. This has created a need to

purchase water from the Municipal Water District of Orange County to

replenish the county’s groundwater basin. That agency is also

expecting rate increases.

Municipal Water District of Orange County General Manager Kevin

Hunt said his agency is raising the price it charges to water

districts to account for the increased cost of treating water. By

2006, that rate will likely increase from $475.50 to $488.50 per

326,000 gallons. That unit, called an acre foot, is described by

water agencies as the amount of water one to two households use per

year.

Mesa Consolidated is not the only local water district expecting

to pass suppliers’ rate hikes to customers. The Irvine Ranch Water

District, which serves Newport Coast, has its own wells but purchases

the remainder of its water.

David Ferguson, the district’s director of special projects and

acting controller, said he expected his district’s board will pass a

rate hike in June.

Most Newport Beach residents’ water is piped to their homes by the

city. Newport Utilities director Eldon Davidson said most of the

city’s water supply comes from groundwater, though the city buys

about one-third of its supply.

Davidson said a rate increase is likely, but city staffers are

still planning the budget.

“We’re all expecting some increase of some magnitude, but it’

going to be different for all agencies,” Davidson said.

* ANDREW EDWARDS covers business and the environment. He can be

reached at (714) 966-4624 or by e-mail at andrew.edwards@latimes.com.