It's no secret that water rates are always on the rise. It's also no secret that Fullerton officials have some serious explaining to do about the Water Fund franchise fee.
But when I showed up to the Wednesday evening Water Rate Study Ad Hoc Committee meeting, I had no idea it could and would get worse.
First, some background on "pass-through" costs. We buy water from Metropolitan Water District of Southern California (MWD) and we pay a pumping tax to the Orange County Water District (OCWD). Since we pump about 2/3 of our own water we also have to pay Southern California Edison and the City of Anaheim for electricity we use from them.
As the MWD, OCWD, Edison, and Anaheim raise their rates to us, so must we pass them on to Fullerton water customers. These are known as "pass-through" costs.
During Wednesday's meeting it was announced that MWD will be raising water rates in January 2013. (There is an entire background story about MWD water rates that I will ignore for now so as not to put you to sleep.) Knowing that there will be a MWD rate hike in a year means the City is gearing up to pass those increases to us in July. So, if MWD rates aren't going up until January, why does the City want to pass-through a non-existent rate hike in July?
Near the end of the meeting there were three motions made.
First, the Committee recommended to the City Council to raise water rates in July consistent with the anticipated pass-through increases. I voted NO and Adan Ortega Abstained. It passed.
Second, the Committee recommended that all revenue collected as a result of the pass-through increases be exempt from the franchise fee. This was, believe it or not, recommended to the Committee by City staff. I voted NO but probably should have abstained because, although it sounds good, the pass-through as we have seen is not an actual pass-through of rate increases. The motion passed.
Third, the Committee recommended that the City's appointed representatives to MWD (Jim Blake) and OCWD (Council Member Don Bankhead) appear before the Committee to explain the nature of the rate hikes by their respective agencies. I voted YES as did the rest of the Committee.
I will try to articulate my concerns again to the City Council, though by now they have already read this.
I will try to get a MWD budget briefing posted here in the next week or so. If you would like to read the budget, you can download it at http://www.mwdh2o.com/mwdh2o/pages/finance/budget/PAB2013.pdf.
Thank you to the residents and business owners who attended the meeting. Your input is invaluable and much appreciated. We need more community involvement.