The Metropolitan Water District of Southern California, which provides water to more than 19 million people over six counties, recently announced it will increase rates and property tax levies the next two years while the state goes through various changes to its water system.
The agency’s 38-member board voted April 9 to increase water rates by 8.5 percent in 2025 and another 8.5 percent in 2026.
This decision impacts customers in Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura counties, which are served by the water district and 26 of its member agencies.
The increases were part of a $2.4 billion budget, approved by the Metropolitan Water District Board of Directors last week, and will help cover its operations and debt service for the next two fiscal years. The newly approved budget also allocates $636 million for capital investments and nearly $100 million for conservation programs in response to environmental challenges.
“As we embark on these major changes, this budget provides us the fiscal stability we need for the next two years,” Metropolitan Board Chair Adán Ortega, Jr. said in the same press release. “The budget dovetails with the new business model process to ensure the means for resilient infrastructure investment for climate adaptation and to address inequities such as the treatment surcharge.”
District leaders said the rate hikes are necessary to offset the revenue lost from decreased water sales during recent droughts and record-breaking precipitation, as well as to cover rising labor and energy costs due to inflation.
Additionally, the district indicated the rate hikes are essential to cover the costs of importing and treating water, which often travels hundreds of miles from northern parts of the state or the Colorado River.
The costs of upgrading various water infrastructure have also increased due to the statewide water conservation efforts aimed at combating climate change, the district said.
“The difficult reality is, our costs have risen while revenues have dropped, so we need to take the fiscally responsible step of adjusting our rates,” Mr. Hagekhalil said.
As revenues from water sales become less predictable due to fluctuating weather and water availability, the district is expecting to raise its property tax assessment—which has been collected by the agency for decades to fund importing water from the State Water Project, a 700-mile-long system that distributes water across California—as a potential solution. According to the water district, the increase would enable the board to reduce the now-approved rate hikes.
Based on the budget, which includes $18 million in spending cuts, the increase would amount to $2 to $3 per month for a typical household.
However, board members representing Los Angeles—including Carl E. Douglas, Matt Petersen, Nancy Sutley, Miguel Luna, and Tracy Quinn—opposed the tax increase and abstained from Tuesday’s vote.
“Shifting water bill collections onto property tax will effectively raise the cost of housing for every citizen in the region, especially those in the disadvantaged communities,” they said in a collective letter to the water district in March.
They argued that rushing a tax increase is premature and recommended that the district’s management thoroughly study this approach before moving forward.
Others opposed the rate increase.
Chris Enegren, mayor of Moorpark, a city in Ventura County, voiced his concerns to the board, describing the rate hikes as “very problematic for our citizens” and attributing them to “poor management,” the Los Angeles Times reported.
But Bruce Reznik, executive director of Los Angeles Waterkeeper, a nonprofit that supports environmentalist policies for Los Angeles-area waterways, voiced support for the property tax increase, property taxes saying it would provide stable and equitable funding for Southern California residents, according to the Los Angeles Times.
Mr. Reznik said this approach would result in a relatively minor impact on residents while the district works to balance its revenue.
