CVWD Holds First of Three Public Workshops

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The Crescenta Valley Water District has brought on a financial consulting firm to establish a financial plan that could lead to a restructuring of customer water rates as early as next summer.

CVWD held the first of three public workshops on Nov. 18, introducing their partnering with Raftelis Financial Consultants, who will analyze the district’s financials and design new water and sewer rate structures. The new rates will be tailored to bring in enough revenues for the district to complete a number of capital improvement projects, while also balancing goals for water conservation and affordability, CVWD and Raftelis officials said.

CVWD Engineer David Gould said that the district is committed to replacing aging infrastructure affecting water supply, storage, quality and distribution.

Gould said that the ideal is to

establish a 10-year infrastructure replacement cycle, estimated to cost $37.8 million, averaging out to about $3 million to $4.5 million per year. Gould said that currently CVWD is spending $2 million annually on replacement and, according to CVWD Chief Financial Officer Ron Mitchell, the drought and subsequent restrictions set forth by Gov. Jerry Brown have negatively affected the district’s revenues.

“The question we’ve been asking from the staff level to the board level is ‘How long can these projects be deferred? How long can we run these things to failure?’” said Gould, who cited recent breaks in La Crescenta water mains and pipes as an indicator of the district’s need for addressing infrastructure.

Sudhir Pardiwala and Kevin Kostiuk of Raftelis Financial Consultants presented a tentative plan for evaluating the district’s costs and designing rates that do not exceed the costs of providing services.

The results of Raftelis’ analysis could possibly move CVWD away from its current inclining tiered rates towards a uniform fixed rate, a modified inclining rate that bases its tiers on sources of water, or a water budget-based rate that takes a resident’s lot size and number of occupants into account.

Pardiwala said the majority of California water agencies have used an inclining, tiered rate structure over the past 10 to 15 years, primarily for its tendency to promote conservation. He also said that many utilities are moving away from uniform rate structures, as they are weak on conservation and do not take into account the multitude of factors differentiating a district’s customers, who often demand widely varying amounts of water.

This is contrasted directly by the water-budget based structure, which charges customers differently for indoor and outdoor use, and is also calculated with a number of factors in mind, such as the size of a customer’s household, landscape area, the number of people in a household, amount of irrigated water required per plant and more.

CVWD General Manager Thomas Love said the budget-based rate could prove to be costly due to the amount of research and data that would have to be collected.

Raftelis will also be evaluating two different wastewater rate structures. These are the current fixed bi-monthly rate and an alternate fixed and variable rate structure, which would consist of a fixed-service charge and a variable water use component.

Two more workshops are slated for January and February, at which point a preliminary report from Raftelis should be available. The new rate structure will be adopted in June.

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