Check the facts below on LVMWD and our business.
I read in the May 7th edition of The Acorn* that LVMWD has plans to increase its water rates by the end of the year. Is this true?
No. LVMWD does not have any rate increases planned at this time.
On April 14, 2020, the Board of Directors of the Metropolitan Water District of Southern California (MWD), LVMWD’s imported water supplier, voted to increase its rates by 3%, effective January 1, 2021, and 4%, effective January 1, 2022. These increases will result in higher costs for LVMWD to purchase water from MWD. Over the last five years, these increased costs from MWD have been incorporated into LVMWD’s rates in the form of a “pass-through” that was approved by the LVMWD Board of Directors on October 26, 2015 pursuant to California Government Code Section 53756. The pass-through amounts have ranged from $0.03 to $0.07 per unit of water, which correlates to a 0.7% to 1.5% increase in the average customer’s bill.
However, the LVMWD Board’s 2015 action does not allow for any additional pass-through adjustments to rates after January 1, 2020. Also, the LVMWD Board recognizes the financial hardship that customers are currently experiencing due to COVID-19 and has not made a decision to make any adjustments to rates (pass-through or otherwise). If any adjustments to rates were to be proposed, LVMWD would be required to mail a notice to each customer, conduct a public hearing and majority protest proceeding, and approve the change by a majority vote of its Board.
*The on-line version of the pg. 1 article was corrected, but the print version and E-edition remain unchanged. Click here for a comparison that reflects the corrections.
What is LVMWD doing to help its customers in light of the COVID-19 emergency?
The LVMWD Board has passed two emergency declarations that include the following measures to minimize the impact of the COVID-19 emergency on its customers:
- Avoid shutting off water service for non-payment.
- Discontinue the issuance of door tags and associated fees for nonpayment.
- Waive late charges for past due water and wastewater bills.
- Offer and execute interest-free flexible payment plans for customers with delinquent accounts stemming from hardship associated with COVID-19. The terms of such payment plans may be for up to 24 months with flexible amortization schedules to best address the unique challenges of customers. The applicable interest rate shall be zero percent (0.00%).
- Allow commercial customers to temporarily “suspend” service while their places of business are unoccupied to stop all water and wastewater charges. Also, normal fees for reinitiating service will be waived.
Doesn’t LVMWD have financial reserves and can’t those funds be used to forgive customer bills?
LVMWD does maintain reserves in accordance with Board-adopted Financial Policies. Most of the discretionary District’s reserves, which currently amount in total to about 11 months of annual expenditures, are set aside for emergencies, insurance deductibles, and the replacement and maintenance of the vast network of infrastructure that serves its customers. Maintaining reserves for these purposes is very important to support the District’s recovery following disasters like the 2018 Woolsey Fire. These funds cannot be used to forgive customer bills.
What is LVMWD doing to protect its employees from exposure to COVID-19 and ensure the continuity of its services?
LVMWD’s top priority in its response to the COVID-19 emergency is to protect the health and safety of its employees and customers. Beginning the week of March 16th, LVMWD initiated telecommuting for its office employees and established special alternate working arrangements for field staff to allow them to work more independently. Although LVMWD employees are not subject to the County of Los Angeles' Safer at Home Order because water and wastewater services are essential, we are following the provisions of the order to maximum extent practicable, particularly those provisions related to social distancing. Also, LVMWD’s offices were closed to the public, effective March 17, 2020, to reduce the potential exposure of employees to COVID-19. Together, these actions support LVMWD’s ability to keep its employees healthy and maintain the continuity of its services.
Has the District taken any measures that would preclude future relief for customers?
No. In fact, LVWMD has been advocating at both the state and federal level for financial support to provide additional relief to its customers.
Why do water agencies need to raise their rates?
Water agencies across California, including LVMWD, are faced with increasing costs. In terms of operations, there are escalating costs to purchase imported water, chemicals, fuel and electricity. Also, most water agencies are challenged with aging infrastructure that requires replacement and rehabilitation to maintain reliable service to customers. Although cost-saving measures can help to reduce the effect of these escalating costs, they ultimately put upward pressure on rates.