Water Authority to return $8.7 million to its member agencies

Short Title
Water Authority to return $8.7 million to its member agencies
December 06, 2001

The San Diego County Water Authority's 23 member agencies will receive part of a refund totaling $8,702,315, the Authority's share of a credit for water rate-overcollections by the Metropolitan Water District of Southern California. The Authority buys as much as 95 percent of the water imported for use in the county from MWD. The Water Authority's board of directors voted today to authorize the agency's general manager to refund the overcollected rates to its member agencies. Checks will be issued on the same day that the Authority receives a credit for this amount from MWD for its November water bill, which is anticipated to be December 31, 2001.

"Refunding this money to our member agencies -- which was over-collected by MWD -- is the right thing to do," said Jim Turner, chairman of the Water Authority board. "Our delegates to Metropolitan have repeatedly urged the board to return this money".

The authority calculated the amount of the refund to be allocated to each member agency based on the proportional amount of financial contributions to MWD that each agency made from May 1, 2000 to April 30, 2001. The financial contribution of an agency is based upon water sales, net of seasonal storage and agricultural credits. Of the total refund, the Authority will retain $22,452 for water that it purchased and put into inventory during the referenced period.

MWD has had a history of over-collecting revenues from member agencies. Previously in 1996, MWD issued refunds that the Water Authority also distributed to its member agencies. The Water Authority representatives to the MWD board of directors have repeatedly questioned these overcharges.

As of June 30, 2001, MWD had $83.5 million in its Water Rate Stabilization Fund. While the Water Authority agrees that MWD should maintain such a reserve fund (the Authority has one of its own to help maintain stable water rates) the amount held by MWD is excessive by even the most conservative estimates.

The MWD board of directors voted Oct. 16 to allocate 60 percent of the $83.5 million toward the cost of its Capital Improvement Plan to avoid issuing additional debt. The remaining 40 percent, $33.4 million, was to be credited to member agencies, including the Water Authority, against future water purchases. The Authority is MWD's largest customer and is receiving approximately 26 percent of the $33.4 million being refunded by MWD.

"This refund belongs to the member agencies who over-paid for water from Metropolitan," Turner said. "My only regret is that we are not able to return the entire amount of the excess revenues."

The San Diego County Water Authority is a public agency serving the San Diego region as a wholesale supplier of water from Northern California and the Colorado River. The Water Authority works through its 23 member agencies to provide a safe, reliable water supply to almost 3 million county residents.

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