Brace yourself: Water rates are about to rise like a flood

The cost of water is going up, and residents should prepare for a "really, really large increase in water rates," said Mark Watkins, Thousand Oaks public works director.

The city is asking the Metropolitan Water District (MWD) of Southern California for an extension on a proposed increase from September to January and moderate increases over time, he said.

The water district has given two options—a 34 percent average rate increase on Jan. 1, 2010, with a 5.5 percent increase in 2011, or a 20 percent increase in September with a 21 percent increase Jan. 1, 2011. Thousand Oaks likes neither choice.

Calleguas Municipal Water District, a water wholesaler, buys water from MWD and sells it to the three water companies that provide water to three areas of Thousand Oaks: the city water company, California American Water and California Water Company.

The city water company doesn't make a profit but tries to break even. An increase in September won't give the city enough time to raise its rates so it won't lose money, Watkins said.

It takes about six months to approve a rate increase. Because of Proposition 218 regulations, the city must give residents notice and allow 45 days for citizen protests, then the City Council has to vote and wait 30 days for a second reading, Watkins said.

If the rates go up in September, the city will have to dip into water reserve money, he said.

"Two-thirds of our budget is the cost of purchased water," Watkins said.

The water companies will eventually have to pass the increase in rates along to their customers.

All local water districts must pay for the infrastructure that delivers water to Southern California. They must also pay to upgrade older valves and replace pipelines and pumps.

The supply of water coming in to Southern California has been reduced due to a decrease in the population of smelt fish, deemed endangered by California wildlife experts.

Some say the low smelt population was due to their being sucked into water pumps; others blame pesticides. At any rate, the dwindling smelt population has resulted in a lawsuit that has slowed the pumping of water out of the Sacramento-San Joaquin River Delta.

As the smelt battle rages on in court, the U.S. Fish and Wildlife Service announced last week that the population of delta smelt will not be protected under the federal Endangered Species Act.

Meanwhile, water prices go up as there is more demand and a lower supply.

Water districts must pay higher prices to get water from areas besides the delta while still paying off bonds purchased to build the infrastructure to pump water from the delta.

At the City Council meeting next Tuesday the new water conservation order is scheduled to be discussed along with possible tiered rates for the city's water company. Go to www.toaks.org to see the council's agenda and read the city staff report that will be made available to the public tomorrow.