Get Ready to Open Your Wallets: Coachella Valley Water District Officials Make the Case for Hefty Rate Increases—but Not All Customers Are Buying the ArgumentsWritten by Kevin Fitzgerald
Since March 24, the Coachella Valley Water District management team has been conducting a series of public presentations billed as “Water Rate Workshops.”
The managers’ goal of these presentations: Cnvince wary customers to go along with a proposed four years of considerable water-rate increases, slated to start on July 1.
The CVWD board of directors will decide on the first year of proposed increases on June 14.
At the May 2 workshop, many customers of the utility—which provides water to most of the valley from portions of Cathedral City eastward—left unconvinced about the need for the rate hikes, despite the arguments made by CVWD General Manager Jim Barrett and Conservation Manager Katie Ruark.
The CVWD cites three main factors in the increase request: a decrease in revenue due to successful conservation efforts which obviously reduced water sales; water treatment needed to meet newly adopted state drinking-water standards for chromium 6, which will cost the agency about $250 million; and system maintenance and upgrades needed to serve the 318,000 residents who rely on the agency for reliable and safe water.
Many audience members had legitimate questions regarding the proposed CVWD responses to these financial challenges.
It was obvious from the start of the state-mandated water-conservation effort in 2014 that all water agencies’ revenues would decrease if customers’ water usage decreased. The CVWD relied on budgeted reserve funds and customer over-usage penalty fees to bridge the gap, and understandably, those resources will not be sufficient to cover costs moving forward.
But are there other areas in the current CVWD budget where money might be saved? Employee-compensation costs make up 39.2 percent of the domestic-water-service expenses at the agency. Barrett mentioned that more employees had been hired in the past few years after a decrease in staff following the Great Recession, but he indicated that employee costs were not a factor in the move to increase rates.
On the other hand, in a recent interview, Heather Engel, the CVWD director of communication and conservation, recently told us: “When those chromium 6 treatment plants are built, we’re going to have to hire a lot more people, because we will need them to operate the plants.”
That leads to an interesting question regarding the proposed $250 million chromium 6 treatment plan: A customer at the May 2 workshop asked if the utility had considered pushing back or initiating a lawsuit against the new state mandate. The response: After serious consideration, the board chose not to push back, and instead to implement the costly treatment solution.
The chromium 6 situation happens to be much different on the Coachella Valley’s western end, where water customers are served by the Desert Water Agency.
“The DWA is extremely fortunate, because a lot of the (aquifer) recharge happens right in our own backyard,” said Ashley Metzger, the DWA outreach and conservation manager, in a recent interview. “One effect of that process is to dilute the naturally occurring chromium 6 levels, because the Colorado River water has no chromium 6. We’re actually below the (state’s new) 10 parts per billion threshold level, so we’re not going to have to treat anything.”
However, Metzger did express doubts about the need for the new strict state standard.
“I would argue that we don’t know if there’s a threat at all,” she said. “Our federal level is currently 100 parts per billion, and (in California), we’re now talking 10 parts. A part per billion is like if you had $10 million worth of pennies, you’re going to be able to find one of those pennies that’s different than the others. Science has evolved very quickly, and because we’re able to detect minute traces of substances, there’s a tendency, I think, to regulate based on the ability to detect. But sometimes (that tendency to regulate) is for the good of the community, and other times, all the factors are not evaluated.”
Back to the Coachella Valley Water District: Are these proposed rate increases a foregone conclusion?
“(The board has) a proven history of listening to the customers and trying to be responsive to their feedback,” Engel said. “But let me say that this is not a popular rate-increase proposal. This is going to mean that most homeowners will see an increased rate of about $6 per month, but (homeowner associations) and businesses are going to see a much more significant increase on their bills, and we know that. So we have not proposed this plan without a lot of thought and consideration from CVWD.
“The challenge that we face results from the cost-of-service studies. In order to have rates that are defensible against any lawsuits, we have to base any increase on a cost-of-service study. Our consultants came back and said that we are not charging customers what we should be.”
Do the CVWD’s domestic water customers have any real voice in this debate? They do, according to the agency’s “Important Information About Your Rates” brochure, recently mailed to all invoiced customers.
In the section titled “How Can I Participate?” there is this clause: “At the time of the public hearing, the board of directors will hear and consider all written protests and public comments. After the hearing, if a majority of the property owners of the impacted parcels or tenants directly liable for the payment of the charges submit written protests in opposition to the proposed rate increases, the increases will not be imposed. If a majority protest is not received, CVWD’s board of directors may adopt the proposed changes, though they are not obligated to.”