Comments
GUEST WORDS - “On April 9, 2024, the MWD Board voted to double their portion of property taxes throughout their service area with little public notification. Without intervention, this property tax assessment could continue to grow to cover billions of dollars in future MWD expenses with no voter approval. ”
This would give the Metropolitan Water District (MWD) the opportunity to use property tax financing to cover the costs of major water supply projects such as their Pure Water Southern California and the Delta Conveyance projects, amounting to many billions of dollars. This approach would allow them to keep their water rates low.
Affordability Concerns for Los Angeles Residents
The key issue is affordability for Los Angeles residents. Funding these projects through property taxes would lead to significant tax increases for underprivileged residents, who make up a substantial portion of the LA population. These residents would have no control over the increased property taxes. Conversely, funding through water rates would incentivize and enable residents to lower their bills through conservation measures, thus reducing their water usage and expenses.
Public Outreach and Informed Decision-Making
At a minimum, MWD should be required to undertake an aggressive public outreach program to inform the general public about the need for the tax increase. Relying on input from a single board meeting, which most of the public were unaware of, does not constitute satisfactory outreach. This decision should be made through a ballot measure, allowing the public to decide whether to authorize MWD to use tax revenue for their water supply development program.
Impact on Los Angeles Water Purchases and Taxes
Over the last decade, the portion of water purchased by Los Angeles from MWD has been approximately equal to the 20% of the MWD taxes paid by LA residents. (See Below) However, these purchases will decrease significantly in the near future due to LA's investments in groundwater treatment facilities, which will restore or increase groundwater supply from the San Fernando Valley. Additional supply will come from investments in capturing stormwater in the San Fernando Basin. A large part of these investments has been funded by the citizens of Los Angeles through their water rates. Consequently, under the MWD proposal, LA residents would pay higher taxes than their proportionate share of water usage. As a historical note, in the early years of MWD’s existence, Los Angeles taxes that were much higher than its proportional water use made possible the current MWD supply system, which is benefitting all of Southern California.
Future Water Supply Projections
The Los Angeles Department of Water and Power (LADWP) looks to secure an additional 60,000 to 70,000 acre-feet annually through new groundwater treatment facilities nearing completion. Substantial additional water supply will also come from stormwater recovery projects currently in development and more supply anticipated from the development of Operation Next.
Legal Considerations
The City should seek an opinion from the City Attorney regarding the legality of MWD’s action, which appears to contradict the restrictions on the use of tax revenue specified in Section 124.5 of the MWD Act. (See Below)
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City of Los Angeles purchases of water from MWD
YEAR Acre Feet
2014 441,989
2015 355,459
2016 332,918
2017 ` 216,799
2018 182,794
2019 137,727
2020 152,578
2021 316,647
2022 366,718
2023 219,539
AVG 273,317
Percent of MWD Sales 19.97 %
LA % of MWD Assessed Valuation 20.76 %
(Jerry Gewe was the former head of the LADWP Water System and played a key role in the Memorandum of Understanding between the Department and the Neighborhood Councils.)
