Rates for Crescenta Valley Water District customers are going up 8.2% in January, and other increases in the next five years are likely as the utility tries to maintain its aging infrastructure.
After the January rate hike, the price per unit will go up another 3.1% in July under a plan approved Tuesday by the utility’s board of directors.
Board members Judy Tejeda and Kerry Erickson voted against the plan, saying they would have preferred a smaller boost of 5% in January and 3.1% in July to give residents relief during tough economic times.
But the three-member majority described that tactic as stalling the inevitable.
“It makes it easier for our customers in the short run, but it kicks the can down the road,” said James Bodnar. “It’s a question of raising rates sufficiently to cover the needs for capital improvements that we have.”
Customers using 22,000 gallons of water in two months would see their bimonthly bill rise from $119.36 to $129.20 beginning in January, according to the water district. Residents who use more water would pay higher rates.
In January, the utility raised the average rate by 8.4%, preceded by a 2% hike in January 2010. In 2004 and 2005, rates shot up 10% and 11.8%, respectively.
At the meeting Tuesday night, General Manager Dennis Erdman held up a 4-inch ring of corroded steel pipe, which was so damaged that it had to be covered in duct tape to show it off without exposing its sharp edges.
“It’s very important for us to pay attention to this so we stay on top of projects wearing out,” he said.
Customers could still see their rates increase between 3% and 8% through 2017 in order to raise $2 million a year for the next five years on capital improvements, according to a district report.
Water officials would prefer spending twice that per year.
Residents at the meeting who hoped for a reprieve said they were disappointed with the decision. Others said they wished officials could figure out ways to stretch the district’s money.
“I want them to learn how to do more with less,” said resident Greg Wilkinson.
In addition to the rate increase, the board approved a $10-million, 30-year bond. The district has already run through most of the $10-million bond it got in 2007 for capital improvements. That bond is scheduled to be paid off through 2037.
Utility board President Kathy Ross said the bond strategy in 2007 was to get the money, use it, and then figure out what’s next.
“At the end of this bond we will have the funding to do pay as you go,” Ross said. “We learned our lesson the last time.”
Tejeda pushed the board to dip into its approximately $3.5-million reserve rather than get a bond, but officials said that even if the utility used all its reserves — a move they opposed — there wouldn’t be enough money.
The divisive discussion came after the board received its 2011 audit results, which stated total 2010 expenses increased 14%, or $1.51 million. About 45% of that came from rising general and administrative expenses due mostly to higher employee salary and benefit costs.
Rising costs for imported water and the inability to pump more from local aquifers has also pushed expenses higher.
The district imports much of its water from the Metropolitan Water District of Southern California, which has been steadily raising its own wholesale rates. Officials hope the planned capital improvements on pipes and wells will allow them to pump more of their own water and decrease their reliance on Metropolitan.