Citing a litany of factors increasing the cost of water delivery in the Santa Clarita Valley, the SCV Water Agency authorized a five-year plan to raise rates, which will help eliminate a growing debt concern for water officials.  The new rate plan is expected to go into effect July 1.  T he water agency’s board of directors voted 8-1, with Kathye Armitage as the lone no vote.  Armitage said she appreciated the staff’s diligence and transparency on the rate increase, but would have liked to see more discussion on how the agency could have lowered its expenses. She knew a rate increase was necessary, but felt the process was too focused on the revenue-generation side of the budget.  Rochelle Patterson, chief financial and administrative officer for SCV Water, began the hearing by laying out the nine-month process behind the rate increase, noting the causes — rising inflation, construction costs, state and federal mandates and less growth than anticipated over the last rate cycle — that brought the district to its current need.  Matt Stone, general manager for SCV Water, said Tuesday the efficiencies created by the agency’s formation, which was the pitch to ratepayers in 2018, far exceeded expectations — more than $20 million had been achieved by 2021.  However, since then, “there’s been a pretty significant list of things” that have happened to the industry, Stone told the board of directors.  “We talked about the inflation impacts on that one slide, that’s an impact that everyone has had to deal with,” Stone said, referring to the presentation. “We also had PFAS detected in our community,” he said, referring to contamination and cleanup efforts that continue to need monitoring, which have been the subject of lawsuits filed by SCV Water.   “We had a significant number of water-supply wells that were knocked offline,” he said, which adds to the amount of water the agency has to buy for blending, as well as its treatment costs. “And we’ve had to expend what will end up being hundreds of millions of dollars to address that contamination and protect public health and bring those supplies back online.”  He said the lawsuits and grants are likely to only cover “a fraction” of what the agency will end up having to spend to make the contaminated water safe again.  There were also unforeseen factors that impacted usage, and therefore SCV Water’s revenue over the past five years. There’s been less development than anticipated, which lowers the number of connections the agency relies on for revenue, and a multiyear “epic drought” resulted in a state call for a 25% reduction in usage from customers — which also lowered demand.   Stone said if the valley’s previous water agencies hadn’t ended up combining to form SCV Water, he speculated the current cost for ratepayers would be much higher.  The approved rates were formed by looking at the water agency’s needs, as well as consideration of the district’s “legacy costs,” according to a previous explanation by Kevin Strauss, SCV Water spokesman.  SCV Water came together through mergers and legislation, combining the former Newhall County Water District and the Castaic Lake Water Agency. The former CLWA had previously acquired the Santa Clarita Water Co. and the Valencia Water Co. Some of those former agencies’ customers already paid into the system for infrastructure, and there were differing levels of debt carried into the new agency from the former ones, which is why there are different rates set for different parts of the SCV Water’s service area.  The service area for the former Newhall County Water District will see the largest increase over five years, a hike of about 54%, over the next five years. The former Valencia Water Division service area is expected to see the cost go up from $63.99 to $96.09, a 50.1% increase by 2029. Former Santa Clarita Water Division customers are projected to see the smallest increase, going from $67.69 a month to $96.66 monthly.  While one resident questioned why 28% of the agency’s revenue was going to staff salaries, Stone said it’s a very competitive market, and attracting quality engineers and other employees was becoming more and more expensive.   Under state law, a water agency is not allowed to charge more than the cost of delivery to its customers, which was mentioned several times Tuesday.  There also was a presentation from Santa Barbarba-based consultant, RDN, which the agency voluntarily retained as a ratepayer advocate. Armitage praised the board’s move to keep RDN to help with any questions ratepayers might have going forward.  The protest process required handwritten, mailed-in protest cards, or for residents to turn in their formal objections in person at the meeting, if they had a problem with the rate hike.    An agency official said 37,879 protest cards were required to halt the increase. There were fewer than three dozen submitted through the public hearing.  In response to concerns about the outreach, Patterson mentioned SCV Water has had a dozen public meetings on the rate discussion since July, as well as local advertising and social media videos to alert the public.   There were about a dozen members of the public present, most leaving after public comment but prior to the board’s rate discussion.  Board member Gary Martin said the directors understood the concerns mentioned, including those from a woman who identified as a senior citizen and talked about the difficulty of budgeting such cost increases on a fixed income.  “We’re not insensitive to public concern about rate increases,” Martin said, just before the vote to approve. “But I think in the last 12 months or more … staff have really gone over and beyond to try and come up with a fair rate.”   Board member Ken Petersen, former general manager of the Valencia Water Co., said he had mixed emotions about the increase.  “But it is what it is. If you wanna have a reliable water supply that provides great customer service and responds to emergencies, those things have a price tag to them and that price tag is what we’ve been working on for the better part of a year,” he said. “It’s never fun to talk about raising rates.”  The post SCV Water board approves rate hike  appeared first on Santa Clarita Valley Signal. ...read more read less