While the Crescenta Valley Water District was able to bring in more money than it spent last fiscal year, residents shouldn’t expect a series of rate increases to slow down.
That’s partially because the district has moved from using bonds to pay for capital improvements to a pay-as-you-go model and there are a lot of infrastructure improvements that need to be done, officials said.
“Unfortunately, we might have to raise rates more,” said James Bodnar, finance committee chairman for the district’s board of directors.
Without the most recent rate increases, the district wouldn’t have been able to meet its operating expenses, Bodnar said.
While the district brought in about $10.4 million in operating revenues, buoyed mostly by rate increases, it spent roughly $10.1 million, according to a fiscal year 2011-12 audit approved by the board in November.
“We have not spent more than we anticipated to spend, in fact we spent less,” said Chief Financial Officer Ron Mitchell.
Still, due to depreciation expenses, which stem from aging infrastructure, the district saw an operating loss of $1.5 million.
The district, much like the city of Glendale, needs to repair miles of pipes that can be more than 80 years old.
Increasing rates may help hack away at depreciation expenses in the future, officials said.
A water-rate hike, which could be as high as 8.9%, is slated for discussion early next year.
Water rates have been on the rise in the district for years, including a rate boost of 8.2% in January and 3.1% in July.
In addition to infrastructure repairs, outside factors, such as the increasing cost of buying imported water, has led to higher water rates.
In October, sewer rates jumped 8.2% and are set to go up by an additional 8.4% to cover higher wastewater treatment costs.
According to the audit, the utility’s net assets decreased 4.6%, or $1.9 million, to about $40 million last fiscal year. That follows a 4.8% dip in 2011 and a 5.1% drop in 2010.
At the same time, the district’s unrestricted net assets — or spendable money — has continued to decrease over time, from about $9.6 million in 2010 to $5.9 million in 2012.
If the district hadn’t drawn down on that, rate increases could have jumped even more, Mitchell said.
“We use that as a tool to try to slow the rate increases and not get these big spikes up and down,” he said.