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Crescenta Valley water officials set stage for rate increases, $10M in bonds

July 13, 2011|By Melanie Hicken, melanie.hicken@latimes.com

The Crescenta Valley Water District this week adopted a budget built on at least two rate increases and an additional $10 million in bonds to help maintain aging infrastructure.

The board of directors on Tuesday voted 3 to 1 to adopt the budget, although they cautioned that incurring millions in additional debt or raising rates would require separate approvals.

The water utility is already paying debt service on $10 million in bonds, and its customers have among the highest rates in the region.

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“I’m going to support this,” said board member James Bodnar. “But it’s not a done deal with respect to getting the bond money depending on what the costs are.”

Utility officials will now work with consultants to create a bond proposal and then return to the board.

District officials say dwindling revenues in the wake of water conservation rules, combined with the rising cost of imported water, have forced the utility to defer basic maintenance of pipelines and reservoirs in recent years.

And District General Manager Dennis Erdman has warned that deferring the maintenance could lead to a “slow deterioration” of the system.

The majority of board members have said a bond makes the most sense to fund the improvements in order to spread the cost of the improvements among current and future ratepayers.

Board member Judy Tejada voted against the budget, saying she was against putting the utility into more debt to pay for the improvements.

“It just seems to me that there is a lot of gray area in that the cost to the ratepayers is unknown,” she said.

Among the capital projects scheduled for the next year are the $500,000 replacement of 2,000 linear feet of old pipeline, a $1.2 million emergency connection with Los Angeles Department of Water & Power infrastructure and the $90,000-design of a new nitrate removal plant at a local well.

The adopted budget also calls for a 4.9% rate increase in January, with an additional 3.2% increase six months later. Other planned rate hikes through 2016 would add up to an additional 19%, which officials say is needed to keep up with the rising costs of imported water while also maintaining infrastructure.

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