Water fee hikes hit as 'misleading'

By: JOSE CARVAJAL - Staff Writer | Thursday, May 24, 2007 12:30 AM PDT ∞

LAKE ELSINORE -- When water district officials announced last week that they are considering hefty increases to water and sewer rates over the next two years to make up for rising costs, they didn't mention that a significant part of the added revenue would go toward other uses.

The first set of increases, if approved by the Elsinore Valley Municipal Water District board this afternoon, would raise $57.1 million in operating revenues during the year that begins July 1, nearly $10 million more than the district expects to earn this fiscal year.

Of next year's total revenue, district budget documents show, $47.6 million would go toward providing water and sewer service. The remaining $9.5 million, the documents show, would be applied to the district's nonoperating expenses, including debt repayment, construction projects and infrastructure improvements.

In the fiscal year that begins July 1, 2008, another increase to rates would earn the district nearly $62.4 million in revenues. Only $50.4 million of that would go toward operating expenses, leaving $12 million available for nonoperating costs.

That's got some district critics, who say water officials are attempting to sell the proposed increases on their rising operating costs, a little miffed.

But spokesman Greg Morrison said Wednesday the district has regularly used the practice in previous budget years. According to district documents, the district allocated $11.7 million to such expenses in the 2005-06 fiscal year and expects to spend $7.1 million by the time this fiscal year ends June 30.

The district is obligated to use some of the money it collects through water and sewer fees to pay for additional expenses beyond daily operations, Morrison said. While the money doesn't go directly to providing water and sewer service, he said, it does go toward making sure the district has what it needs to provide those services.

For example, some of that money could go toward buying computers or specially-equipped trucks or it could be used to borrow money to build emergency facilities. The district needs to improve its infrastructure to provide quality service, he said.

"You've got to keep doing that," Morrison said. "It's just being fiscally responsible."

Still, the proposed allocations over the next couple of years have rankled critics. Given that they're being asked to swallow significant increases over the next two years, it's a little misleading for the district to attribute the increases to rising imported water and electricity bills, several of them said Wednesday.

A district news release issued last week announcing the possible rate increases didn't mention the additional allocation of money to the nonoperating expenses. And a notice recently mailed to customers about the potential increases said only that they were being partly based on "additional capital needs."

That's not enough, the critics said.

"I think that's terrible," said Lakeland Village resident and frequent district critic Linda Ridenour. "That is very misleading."

In announcing the proposed rate increases, water district officials said they are considering them because the district expects to spend $10.3 million more on operations over the next two years than it is this year. Among the major increases, district officials noted, are $3.1 million more on electricity to power facilities and $3 million more to import water.

"They have to explain themselves a little better," said Pete Weber, who is also the city of Lake Elsinore's elected treasurer. "It doesn't seem that the increases are just because of the water and electricity costs. It's something else."

Under the proposed budget plans for the next two fiscal years under consideration today, residential water service rates would go up about 10 percent the first year and sewer rates would increase to between 10 and 16 percent, depending on where a customer lives. The following year, water rates would go up between 6 and 7 percent and sewer rates would rise between 10 and 11 percent.

The district's board meets to consider the rate increase today at 4 p.m. at district headquarters, 31315 Chaney St., Lake Elsinore.

-- Contact staff writer Jose Carvajal at (951) 676-4315, Ext. 2624, or jcarvajal@californian.com.