PALMDALE — Rates charged to other water agencies and other users of State Water Project water from the Antelope Valley-East Kern Water Agency will increase by 7.5% for each of the next five years to cover cost increases, after the AVEK unanimously board approved a new rate plan Tuesday.

The new rates take effect Jan. 1.

The rate adjustment will allow the agency to cover its projected costs and maintain reserves for any emer­gen­cies or un­ex­pect­ed ex­pen­ses over the next five years, Assistant Gen­eral Manager Matt Knudson said.

According to the pres­en­­ta­­tion to the board, the fi­nan­cial study pro­duced by Raf­­tel­is Financial Consultants in­clu­­ded inflation factors of 4% for per­­son­­nel costs, 5% for utilities, 3% for supplies, general inflation of 3%. Also, a 4% increase in costs for capital improvement proj­ects is included for the 2019 and 2020 fiscal years, and 3% after that.

It also factors in a growth in rev­en­ues from property taxes of 2%.

The rate increase is based on the agency selling 47,500 acre-feet of water in fiscal year 2019, then an additional 2,500 acre-feet each year from 2020 to 2022. After 2022, the agency expects water sales to flatten at 55,000 acre-feet annually.

An acre-foot is 325,851 gallons, or approximately the amount of water a typical Antelope Valley house­hold used in one year, before the most recent drought-reduced usage.

“This is really tied to the ramp down in the adjudication,” Knud­son said, referring to the grad­ual re­duc­tion in groundwater pump­ing — and corresponding increase in water purchases — by water pro­viders involved in the court settlement that set limits on the amount of groundwater that may be used across the Valley.

With storage in local water banks, AVEK will still be able to meet the minimum 47,500 acre-feet of water to sell through­out the rate period, even if deliveries from the State Water Proj­ect are re­duced, he said.

The study also is based on the assumption that the age­ncy will not add any new customers during the period.

AVEK sells water from North­ern California car­ried through the California Aque­duct to Los Angeles Coun­ty Waterworks Dis­trict 40, Quartz Hill Water Dis­trict and other pub­lic and private water pro­vi­ders and agricultural users.

For these retailers, the cost of untreated water from AVEK will increase next year from $385 to $414 per acre-foot, and treated water from $560 to $602 per acre-foot.

The increase also in­cludes a new rate for water de­liv­eries through Los An­gel­es County Wat­er­works to the Acton area, for which there are additional costs that weren’t being cov­ered by the previous rate struc­ture, Knudson said.

The water to Acton is passed through the Palm­dale Water District’s treat­ment plant, which has a more expensive treatment pro­cess using granular act­iv­ated carbon than what is used by AVEK, and ad­di­tional transportation costs for moving the water.

The rate for this treated water is increasing from $560 to $645 per acre-foot, a 20.5% increase, Knudson said.

In calculating the rates, the capital improvement fund is budgeted to be essentially stable for items such as replacing worn out equipment, but it also includes a couple “big ticket” items, primarily a proposed expansion of the Eastside Water Bank, should the agency proceed with that plan in 2021.

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