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FMWD soaks up MWD’s rate increase – that’s good for CVWD

Posted by on Jul 8th, 2010 and filed under News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

By Brandon HENSLEY

The Foothill Municipal Water District will be absorbing 75% of Metropolitan Water District’s rate increase for the 2010-11 fiscal year, which will be beneficial to Crescenta Valley Water District, according to CVWD general manager Dennis Erdman.

In its July 1 news release, Foothill Municipal said its board of directors had adopted a budget on June 25  that would cover most of Metropolitan’s 15% rate increase over the next two years. This comes at a time when Foothill Municipal and its member agencies, one of them being Crescenta Valley, are struggling with budget problems.

In the news release, president of the board Robert Gomperz said the board felt it was necessary to take on the increase. “However, Foothill may not be able to continue absorbing these costs going forward into the future years as we have needs to repair our almost 60-year-old distribution system,” he said, referring to the District’s $63 million plan to upgrade its infrastructure and reduce local dependence on imported water.

The board asked general manager Nina Jazmadarian to reduce expenses for the
District so it could absorb the 75 percent increase. According to the release, Foothill Municipal reduced costs by around $477,000.

“We have tried to contain expenses but not erode our reserves that are needed in case of an emergency,” Jamadarian said.

Erdman, speaking for Crescenta Valley, was pleased at the announcement. “It’s good news for us,” he said.

Recent board meetings for CV have become increasingly about budget concerns, and Erdman said short-term victories won’t cure long-term problems, something he is aware of.

“Our Board of Directors is very much looking for CVWD to do as much in the way of cost retainment as we can and we’re pleased that FMWD took this approach this year, but we recognize that, like FMWD, we can’t continue to do that year after year without having some effect on the overall system reliability.”

Metropolitan approved a 20 percent rate increase last September, and CV absorbed that and didn’t pass it along to its customers.

CV is currently working on submitting its budget to its Board of Directors, which is scheduled to be presented July 20. Erdman said he and the other board members are still analyzing what Foothill Municipal’s announcement specifically means in terms of CV’s budget projection.

There will be a workshop regarding CV’s budget for the coming fiscal year July 13 at 6 p.m. inside the Community Meeting Room of the La Crescenta Library. The next regular board meeting is scheduled for July 20 at 7 p.m.

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