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Election Reality Check: Tank Causing Rate Increases

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This article is in a series of "Election Reality Check" pieces about the election for Las Virgenes Municipal Water District. The statements chosen are based on comments made to Westlake Revelations from the candidates (about what the other candidate has said), as well as reader questions.
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Bowman says "Funds in the bank" for the tank AND it's not the reason for rate increases.
Reality Check: Technically true. In reality, it's misleading and false to say that it isn't related to rate increases.

In a recent Westlake Revelations interview, Director Joe Bowman said "Funds are 'in the bank' for the tank, already reserved for this capital improvement as required by state law. It is NOT the reason why the district is now considering the level of potable water rate increases beginning in 2013."

It is true that the funds are in the bank. Those funds have been saved up over time from what the District has charged rate payers (i.e., reserves come from the difference between what is charged, and what the costs are.)

It's misleading at best, and technically false to say that it isn't related to rate increases.

It's true that the driving force behind the current rate increases are increased internal costs, and increased costs in wholesale water supply. But, that's not the whole picture. The District has a number of options for how it can handle internal and externally caused cost increases.

In April 2012, General Manager John Mundy said, in writing, that if the District doesn't build the tank, the money saved "can reduce or delay future increases" in water rates. That concept has been validated by Director Bowman in the past few weeks when he said that the District's cash reserves could be used to have lower rate increases. Director Steinhardt was the first to champion not building the tank, and instead using the reserves to offset rate increases.

The price tag for the tank project (approximately $7 million) is about equal to the amount of the proposed rate increases for the next few years, although this is likely a coincidence. According to Director Steinhardt, if the District does not build the water tank, it could prevent rate increases for as much as five years.

So, it's true the tank is not responsible for the rate increases and that the money is already in the bank. But, it's misleading to leave out that if the tank is not built, it will prevent rate increases.