Water rates face big hit

LA CRESCENTA — Crescenta Valley Water District board members directed officials this week to include $10 million in additional borrowing in the next budget, and to raise customer rates by more than 25% in the next five years to help maintain aging infrastructure.

The agency’s Board of Directors voted 3 to 1 Tuesday to incorporate $10 million in additional bonds into the final budget proposal for July 12. Even if the board adopts the proposed budget, issuing the bonds and raising rates would require further review.

The water utility is already paying debt service on $10 million in bonds previously issued by the agency.

But district officials say water conservation rules have depressed revenues, and combined with the rising cost of imported water, the utility has had to defer some basic maintenance of pipelines and reservoirs in recent years, which could lead to a “slow deterioration” of the system if left unaddressed.

“You can only put it off for so long,” board President Kathy Ross said Wednesday. “There are things that we really have to address, and in order to keep rates down, doing the bond is the way to do it.”

A bond would better spread the cost of the improvements among current and future rate payers, Ross added.

Board member Judy Tejada voted against including bond borrowing in the budget, citing the approximate $8-million in interest the agency would pay over the next 30 years. Board member Kerry Erickson, who was absent Tuesday, has also expressed opposition to borrowing.

The budget proposal also calls for a 4.9% rate increase in January, with an additional 3.2% increase six months later. Other rate hikes through 2016 would add up to an additional 19%, which officials say is needed to keep up with the rising costs of imported water while also maintaining infrastructure.

The increases would come on top of last year’s average rate increase of 8%, which officials said was needed to keep the utility from continuing to dip into its reserves to cover operations.

Utilities in Burbank and Glendale, which also rely on imported water, have also approved rate increases, but Crescenta Valley rates are the highest among the three agencies.

All three utilities have had to face the rising cost of water imported from the Municipal Water District of Southern California, which has enacted double-digit rate increases in recent years. Crescenta Valley imports about a third of its water from the Foothill Municipal Water District, which in turn relies on imports from Metropolitan.

“All these other people that raise their rates, it comes down to us,” Ross said. “Part of it is just the cost of doing business.”

But some residents opposed to the rate increases say that with roughly half of this year’s budget going toward employee salaries, retirement benefits and other operational expenses, more cost cutting should be done.

“This looks like a Cadillac budget to me,” said resident Gary Wilkinson, one of a handful of residents who attended Tuesday’s board meeting. “There’s really no pain in here.”