Water costs spur rate study (October 13, 2015)

ADELANTO — The city’s public utility authority on Wednesday could approve a five-year water rate analysis aimed at determining the suitability of current rates, as operating costs rise and the city deals with a state mandate to cut water use by 20 percent.

A key objective in developing a comprehensive water rate study is to generate sufficient revenue to fund the operating and capital needs of the water utility, a city staff report said.

Huntington Beach-based accounting firm Peasley, Aldinger & O’Bymachow have been contacted to conduct the study at an estimated cost of $18,980.

The study is expected to not only allow the Adelanto Public Utility Authority to analyze its financial operations, but also address a state enforcement action letter recently sent to the city related to its failure to meet its water conservation mandate over back-to-back months.

It’s a mandate the State Water Resources Control Board has already acknowledged the city is unlikely to meet through February. In July, the city reduced water usage by 10 percent and then 13.6 percent in August, even as city officials commended residents for doing their part for some time to reach the goal.

In the Aug. 31 letter, the water board ordered the city to, among other requirements, examine the feasibility of implementing penalties on water users that exceed the set per capita limit based on the 2013 baseline.

The order also includes pushes in public outreach, participation or implementation of an active rebate program, implementing a leak-detection and monitoring program, audits of commercial, industrial and institutional customers and the hiring of two new or existing part-time employees within 60 days to enforce outdoor water restrictions. All these items listed by the state either will be a cost burden to the APUA or potentially hurt the APUA revenues negatively, the staff report said. These will all be reviewed under the water rate study to ensure we meet the state’s enforcement action list.

The authority last approved rate adjustments in August 2009, which extended through three years. It was admittedly a significant increase at the time, coming seven years after the most recent adjustment before it.

The staff report notes that the proposed five-year rate analysis is highly recommended to avoid an increase such as was seen in 2009. Since then, however, labor, utilities and accrued debt have resulted in escalating costs to the authority, officials said.


Source: Shea Johnson, Daily Press