California State Auditor’s Report: Apple Valley area water rates (April 30, 2015)

Differences in costs affect water utilities’ rates, and one utility may have spent millions of ratepayer funds inappropriately

This report concludes that a variety of cost factors and differences in costs among the utilities contributes to the variations in the four utilities’ water rates but, overall, the two private water utilities had higher costs and therefore higher rates. A key factor that contributes to the differences in costs among the water utilities is the inherent difference between private and public water utilities. For example, the two private water utilities incur costs that the public utilities do not, such as income and property taxes. Public utilities, on the other hand, receive revenues from additional sources, such as property taxes. Because of their different cost structures, water rates for the two private utilities have increased in recent years.

Elaine M. Howle, CPA, State Auditor