2016 Rates
Rate increases near low end of projections
In June, the Board also adopted rate increases of 6.6 percent for untreated water and 5.4 percent for treated water, starting Jan. 1, 2016.
The Water Authority will charge its 24 member agencies the municipal and industrial rate of $1,159 per acre-foot for untreated water in calendar year 2016, or $72 more than they paid in 2015. The Water Authority also will charge $1,439 per acre-foot for treated water, or $74 more than in 2015. Actual figures will vary by member agency, and each member agency will incorporate costs from the Water Authority into the retail rates it charges to residents, businesses and institutions.
The adopted rates were near the low end of projections made in 2011, and well below the double-digit increases during the last drought that were driven by steep price hikes from the Metropolitan Water District. To moderate rate increases, the Water Authority restructured its debt and planned a strategic draw from its Rate Stabilization Fund to minimize the impact on ratepayers.
Debt defeasance helps minimize rate increases
The Board of Directors in September approved a series of actions to reduce the Water Authority’s debt portfolio, providing rate relief and staying on the cutting edge of best accounting standards. The moves will help the Water Authority reduce future financing costs by $85.4 million over 20 years.
The strategy involved using money from a lawsuit settlement and savings in the operating fund to pay down (or defease) $56 million in liabilities for two senior lien bond series (2004 and 2008). That reduced annual debt service requirements, creating a long-term savings that will help offset other costs.
Board direction also included pre-paying liabilities for the Water Authority’s retiree health care program known as Other Post-Employee Benefits, or OPEB. The Water Authority paid off a $5.8 million OPEB liability, and – for the first time – achieved an OPEB surplus of $92,000 at the end of the fiscal year.
