By Mark Muir
As working families across the San Diego region struggle to make ends meet, the Los Angeles-based Metropolitan Water District of Southern California has no such concerns.
That’s because MWD can tax and raise rates at will — and it has done precisely that. Several steps removed from nearly 20 million residents it serves, MWD overcharged ratepayers $847 million more than the agency’s budgets said was needed from 2012-2015.
Anyone who has tried to balance a personal budget won’t be surprised at what happened next: In 2016, MWD authorized $900 million in unplanned debt to help pay for its overspending.
These unrestrained fiscal practices have contributed to a doubling of treated water rates at MWD over the past decade — and ratepayers are about to be on the hook for a lot more unless MWD’s out-of-control spending can be stopped.
A new study commissioned by the San Diego County Water Authority — based on data from MWD and its member agencies — shows MWD’s existing programs and projects can meet water demand projections under all of the hydrological conditions assessed through 2040. That means MWD’s multi-billion dollar plans to develop new supplies are not needed to meet its member agencies’ current or future demands. Instead, MWD’s continued overspending would significantly increase the financial burden on ratepayers and create significant stranded assets.
The analysis confirms that MWD is under-counting local supplies being developed by water agencies across Southern California. Long-term water-use efficiency standards being developed by the state will further reduce water sales.
It’s important to note that these serious fiscal issues go beyond the illegal rates set by MWD that have been successfully challenged by the San Diego County Water Authority in court. A Superior Court judge ruled in 2015 that MWD set illegal rates from 2011-2014, forcing San Diego County ratepayers to subsidize water costs across Southern California.
The judge ordered MWD to pay the San Diego County Water Authority more than $243 million and to set only legal rates in the future. The appellate court is expected to hear the case this spring, with a decision expected later this year. Two additional lawsuits covering rates from 2015-2018 are pending because MWD has refused to limit its rates to the costs of the services it provides.
MWD’s fiscal mismanagement has led us to launch an education campaign called “Stop the Spending!” designed to improve fiscal accountability and governance at MWD. Together, we are shining a spotlight on MWD’s flawed business practices in hopes of protecting residents and businesses from needless increases in their water bills.
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