Metropolitan Water GM defends agency from accusations

Part 2 of 2 parts

 

The first part of this article, about the current water situation in the state, ran last week. This week, the Metropolitan Water District’s general manager, Jeffrey Kightlinger, defends his agency from accusations made by one of its member agencies, the San Diego County Water Authority.

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After his remarks on the state of water delivery in California, Kightlinger took up the issues that the San Diego County Water Authority (the “Authority”) has been making, with representatives of both agencies dogging each other’s trails as they speak before different agency boards throughout the Southland.

Two weeks before Kightlinger’s appearance before the Valley Center Municipal Water District board, Maureen Stapleton, general manager of the Authority had made a similar talk to the VC directors.

He wryly referred to a slide show Stapleton had made and said, “I got these slides and apparently everything we do is wrong!”

Noting that the Authority is characterizing certain investments and other governance decisions by Metropolitan’s Board of Directors as “financially reckless behavior,”  he said, “But these allegations are not supported by the facts.”

Replying to the accusation that the Met “has no long-term plan” he said, “actually what we do is long-term forecasting every two years. The Water Authority is very aware of that but says that we don’t do long-term planning.”

The Met has a long range finance plan. It is in the form of a Ten-Year Financial Forecast that is incorporated into every biennial budget and is posted on Metropolitan’s website.

Kightlinger said the Met looks at State Water Contract costs long-term based on detailed information provided by the state as well as its own forecasts.  “We look at planned future capital expenditures of the State Water Project. And we look at Colorado River power projections in a similar detailed manner,” he said. “Using this information, Metropolitan’s Water Resource Management staff develops future forecasts of demands.”

Addressing the charge that Met’s water rates have been rising at a precipitate rate over the years, he said, “We double rates about every ten years, or about 6.9 percent a year.”

During the drought many agencies purchased more water than they did in normal years because their normal sources of supply dried up.

That is not charging too much for water, he said. “That is called meeting demand to the extent possible and this is Metropolitan’s role as the regional wholesale supplier of supplemental water to its member agencies, especially in the most challenging times such as a long-term drought.”

Kightlinger said that the days of fairly static water rates are probably gone forever because they will need to repair and replace many miles of water delivery system that were installed in the early part of the last century, and later, and are now reaching the end of their useful life. For fairly long periods, sometimes as long as five years during the 1950s and 60s, water rates would remain relatively stable. A similar period of stable prices occurred during the 1990s up until about 2000.

Then the Met began an aggressive campaign of increasing storage, including Lake Diamond in Riverside County, which was one of the largest reservoirs ever created. The cost of such efforts means that the period of stable pricing “is over,” said Kightlinger.

“Our stuff is getting old. Seventy period of our capital budget is to repair and replace an aging system,” he said. “We won’t be taking off five years anymore between raising rates. We WILL be raising inflationary rates for, basically forever.” He admitted, “That’s a tough message to bring.”

In answer to SDCWA’s allegations that the Met has an unmanageable debt load, Kightlinger retorted that SDCWA’s own debt load, for its size, is much larger. He added.

He noted that the Met  maintains high credit ratings, in part, because of the very same water rates and sound financial practices that SDCWA is criticizing. He added that SDCWA fails to mention that Metropolitan continues to maintain some of the highest financial ratings from Fitch, Moody’s and Standard & Poor’s financial rating agencies.

He also defended his district from attacks that it spent too much money on rebates for turf replacement, which he said ended up costing the district about $600 per acre foot of water use saved and not the $40-50,000 AF that critics claim. The real value of the program, he said, was that it encouraged people to change their way of thinking about water, adopting, in effect, a “new culture,” of less water usage. The lesson from the just-concluded drought, he said, “Is that we have to get out of having grass lawns.”

He also defended the big district’s purchase of several islands in the Bay Delta that critics have held up as sort of a white elephant purchase. He said the Met is banking the land for possible use for a needed state water project, and if that doesn’t work out, it can always sell the land, probably at a profit. “We acquired land that we might need—without the use of eminent domain,” he said.

The historically high rainfall and snowfall this year will allow the Met “to bank more water from the Colorado River than in any year in history.”

The Met chief wasn’t able to provide much comfort to farmers, such as VCMWD director Bob Polito, who asked if the discounted ag rates once in force might return some day.

Kightlinger said they would try, “but it’s going to be hard,” because most of the Met’s board is made up of urban districts that have very little sympathy for a district like San Diego that still has a significant amount of farming. He left unsaid the fact that those same urban board members are unlikely to look sympathetically on a district that has taken them collectively to court to fight the cost of transporting water.

3 responses to “Metropolitan Water GM defends agency from accusations”

  1. Alex MacLachlan says:

    This Metropolitan Water District CEO is so out of touch with Californians, he matter of factly states a 100% increase in the cost of his product every 10 years, represented as 6.9% compounded annual inflation to consumers, is normal. His monopolized product rose 500% more than the 10 year inflation average in California (19%). I remember 10 years ago when the Delta Smelt decision came down and forced an immediate 30% reduction in Northern California water transfers to Southern California. MWD immediately asked for a 21% increase in their wholesale water rates. LA’s KFI radio hosts, John and Ken, did some research and found that MWD also asked for a 25% increase in their CalPers pension funding at the same time. The light of truth was cast brightly on this greedy company, so they had to implement their self enrichment program a little more slowly. The fact remains, though, that Metropolitan Water District has made the cost inflation of San Diego county water a very close second only to California state university tuition inflation. Now that’s saying something.

    • James Hall says:

      Just as in any business, when you have less product to sell, but the same high fixed costs, and pending repair and replacement bills for failing infrastructure, you need higher rates just to break even. Being a non-profit, greed does not even enter the equation. In fact, the District does not even act like a regular business in that it discourages use, and thus purchase, of it’s product – water. One would expect that with the surplus we now enjoy they would push consumption of water in order to reap a windfall, but no, the conserve, conserve, conserve mindset still prevails. Thus showing they are attempting to be good stewards of the environment and the blessing of water, and that San Diego is the greedy party – always demanding more for less.

    • Dave Spitzer says:

      Interesting that, for someone who accuses others of greed, the only metric you’re using to judge the activity of MWD is the number at the bottom of your water bill. I love that you cite John and Ken on this subject too. I don’t suppose you tuned in the next day to hear them rant for 4 hours about how government should be run like a business and that greed is good? I also note that you write only in percentages. Before I go through too many Kleenex, I’d like to know how much you use and how much you pay for drinking quality water that’s been diverted 500 miles from its source only to be dumped onto some trees, while those of us not zoned as ag take 5-minute showers and have to scrub streaks out of our toilets because there’s a brick in the tank.

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