Mesa Water District considers hiking rates by 5% a year for the next 5 years, starting in 2018

Mesa Water District customers could see their rates increase by up to 5% a year for the next five years under a plan advanced this week.

District board members voted unanimously Thursday to move forward with the potential hikes during a special meeting.

At the root of the push, officials said, are falling revenues as a result of conservation efforts that began during the drought and recent sharp increases in the cost of water.

“Our costs are going up and our sales are going down,” General Manager Paul Shoenberger said. “If you say, ‘Run this place like a business,’ that’s not good.”

During the drought, the state assigned conservation targets for water agencies. Mesa Water’s was set as high as 20% — meaning the district was selling at least one-fifth less water than before the drought.

“These are business decisions and we need to handle them in a business-like manner,” said board member Shawn Dewane. “As unfortunate as it is that the rate has to be adjusted, for a variety of reasons, I think the real story that needs to be told here is that conservation does not come for free.”

Shoenberger said Mesa Water also doesn’t anticipate seeing sales pick up in the near future as conservation continues.

“We are seeing that the recent growth spurt and infill and new development in Costa Mesa is tapering off dramatically,” he added.

Straining matters further are recent and projected future increases in the price Mesa Water pays for recycled water. It’s set to go from $478.40 per acre-foot to $738 next year, district figures show.

Also going up is the assessment the district pays to the Orange County Water District to pump groundwater.

That stood at $294 per acre-foot in 2015 but will rise to $445 next year and is forecast to reach $625 by 2023, according to figures from Mesa Water.

“This is the new normal,” said board member James Fisler. “Water has been a cheap commodity for many years and it’s more and more expensive. We’re simply passing on our cost.”

Under the current rate schedule, adopted in December 2013, Mesa Water’s 110,000 ratepayers in Costa Mesa, parts of Newport Beach and sections of unincorporated Orange County pay $3.62 per unit of potable water.

One unit is equal to 748 gallons.

Rates vary for recycled water.

Customers are also assessed periodic basic charges that vary depending on the size of their meter, and other miscellaneous fees.

Though they acknowledged there may be some grumbling associated with a rate increase, Mesa Water board members said it’s important to ensure the district has enough money flowing in to cover costs and keep its reserves at a healthy level.

That’s especially true of infrastructure, they said. District staff has identified almost $36 million worth of capital projects that should be done over the next five years.

“We owe it to the ratepayers that they can turn on their tap and there’s water,” Fisler said.

Looking ahead, Mesa Water plans to mount a public outreach and social media campaign to inform customers about the potential increases, according to External Affairs Manager Stacy Taylor.

The board is next scheduled to discuss the matter Sept. 14 and a final draft rate study prepared by Raftelis Financial Consultants Inc. is expected to be complete by Sept. 18.

A public hearing and decision on the proposed rate increases is tentatively set for Nov. 9.

luke.money@latimes.com

Twitter @LukeMMoney