There was a myriad of variables to consider Tuesday at the Crescenta Valley Water District's (CVWD) meeting during which its directors and engineers tried to develop a budget strategy for the 2009-2010 fiscal year and beyond.
Approximately 50 to 60 percent of the CVWD water comes from local sources including wells and the Picken's Canyon tunnel. The rest is supplied by the Foothill Metropolitan Water District (FMWD). CVWD general manager Dennis Erdman explained that starting in September the cost of water coming from the FMWD will increase by 20 percent. There will be an additional 20 percent increase in January 2011.
Another factor that weighed heavily during the budget discussion was operating costs, specifically electricity costs. The CVWD typically spends $750,000 each year to power its pumps to get water up the foothills to customers' homes. Power costs continue to increase, Erdman said, a fact that needs to be taken into consideration when planning the budget.
The CVWD also pays fees to the City of Los Angeles for sewage treatment and disposal. Operation costs for the wastewater system maintenance have remained steady, Erdman explained.
The CVWD has cash reserves to somewhat offset the immediate impact of the drastic rate hikes, Erdman said, but a major overhaul of the budget and billing system is needed to remain viable in the coming years. The CVWD's new fiscal year starts in July.
At the meeting, staff presented three specific budgeting options. The first scenario outlined a seven percent rate increase for customers over the next five years. The second scenario detailed a zero percent increase for 2009-2019 and then a 12 percent increase in 2010-2011, followed by increases of seven to 10 percent in subsequent years. The third scenario, which was the most warmly received, outlined a five percent rate increase for 2009-2010 and 2010-2011, followed by a six to eight percent increase in subsequent years.
One suggestion made by CVWD director Richard Atwater was to add to customers' bill a line indicating what charges come from the CVWD and what come from the FMWD. That way, customers could see the source of additional charges.
â€œIf the price of imported water goes up 100 percent, we are going to pass that through because the customers need to know the price of imported water,â€ Atwater said. â€œIt will encourage them to conserve.â€
Atwater also suggested creating a sort of buffer fund in which the CVWD creates a cushion of cash to protect customers from extreme changes in pricing coming from the MWD.
The directors asked staff to make the suggested modifications to the budget, and to represent the plan at the next CVWD meeting on July 3.