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Water Rates Are Going Up 56% to 137%!

Amador Water Agency (AWA) has approved another water rate increase. It has been only 2 years since they approved a 5-year rate increase plan, and now they want even more from ratepayers.

On 8/1/15, water rates went up by 56% and could go up by as much as 137% over 5 years. Since 2011, the AWA Board of Directors has been increasing their spending on developer projects, employee salaries and even their own compensation. At the same time, they gave away millions of dollars in water. Those funds could have been used to prevent rate increases. Rather than learn from its poor decisions, the AWA board wants to raise your rates and continue to waste money (see chart at right).

Not convinced? Here are more ways AWA is mismanaging ratepayer money:

  1. The initial increases will leave AWA billing its customers $3.08/unit and it could go to $4.67/unit later. AWA admits that the cost to provide the water is only $1.73. It is Illegal for AWA to charge more than its cost to provide the water.
  2. AWA sold Jackson Valley Irrigation District (JVID) 6,000 acre-feet of untreated water for $10 to $12/acft while AWA charges its own customers $257/acft. AWA charged JVID $62,000 for what would cost ratepayers $1,542,000. The $1,480,000 difference could have been used to offset almost two full years of the proposed rate increase. JVID is now selling water to its customers for as much as $84/acft. At that price, JVID would profit $442,000 on the 6,000acft.
  3. AWA has spent more than $200,000 on rate studies. In 2013, their consultant prepared a study for a 5-year rate increase to “cover costs for the next five years”. Just two years later, AWA claims to be short on money again.
  4. AWA is increasing costs instead of decreasing costs:
    • AWA has $40,000,000 in debt and continues to spend.
    • Water-related administrative costs increased from $657,000 in 2011-2012 to $1,025,000 in 2015-2016 (a 56% increase).
    • Employee health insurance is $725,000/year or $18,600/employee.
    • Director compensation increased from $17,000 in 2011-2012 to $45,000 in 2015-2016 (a 165% increase).
    • AWA plans to spend $14,200,000 on projects in fiscal year 2015-2016. A large portion of the costs will benefit massive development in Ione.
    • Between 2011-2012 and 2015-2016, debt service from spending on projects is up from $2,350,000 to $2,760,000. That’s $410,000 more in annual loan payments (a 17% increase).
    • Employee salaries increased by 18% between 2011-2012 and 2015-2016.
    • Employee retirement cost is $460,000/year.
  5. The $15,000,000 Gravity Supply Line Project was to be completed in April 2015. AWA failed to properly qualify the contractor, who botched the job and may file for bankruptcy. To correct leaks and other problems, AWA is spending even more ratepayer money. AWA touted the GSL as a big money saver.
  6. AWA is wasting ratepayer and taxpayer money on a $5,000,000 project to pipe the Amador Canal. This project will serve fewer than 100 customers.
  7. AWA’s rate study shows that the rate increase will bring in an additional $1,035,000 of revenue and AWA’s budget only shows a $720,000 increase. The difference gives AWA $315,000 to spend on unbudgeted project overruns.
  8. A big portion of ratepayer funds are being used to subsidize infrastructure for massive development that will benefit an out-of-county developer.
  9. AWA ratepayers pay a higher monthly service charge than water trucking companies.