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LA WATCHDOG - The Metropolitan Water District of Southern California is a massive, unresponsive, and insular bureaucracy that lacks transparency and accountability to the ultimate end users, the Ratepayers. This includes homeowners, renters (through pass through rent increases), and commercial and industrial establishments. Rather, as a wholesaler to 26 agencies and another 251 subagencies, MWD and its directors are pressured to limit its rate increase so that these public facing entities do not have to raise rates to a level that reflects the true cost of water, fearing pushback from Ratepayers. MWD and its politically appointed board accommodate these agencies by dumping the increased costs onto property owners by levying a Special Property Tax that is buried in our Secured Property Tax Bill (see below) that only comes once a year. This may be in violation of Prop 13.
A recent CityWatch article, Metropolitan Water District’s Billion Dollar Property Tax, indicated that MWD was proposing to increase this tax to $180 for a million dollar home (0.0018% of assessed value), a more than fivefold increase from the 2024 level of $35 (0.0035%).
In a memo to MWD’s politically appointed directors, the General Counsel asserted there were no plans to increase this tax. On the other hand, a 2024 MWD planning document assumes this substantial rate increase through 2034 while limiting rate increases to 5%. Over this period (2025-34), this property tax would raise almost $13 billion, all without voter approval.
MWD claims that this tax increase is essential to its “financial integrity” over the next ten years. There is, however, no analysis to back up this claim. As it is, MWD has a triple A rating from the three main credit rating agencies, a rating that is higher than the federal government. MWD also has over $1.3 billion on its balance sheet, a nice slush fund.
The alternative is to forego any tax increase and cover any additional expenditures by increasing the water rates. This would send a signal to Ratepayers to conserve water, a major goal of the State, the City, the County, and the environmental community.
Rather than continuing to stonewall us, MWD should conduct a series of public meetings to explain the economics behind its desire to raise almost $13 billion over the next ten years through property taxes.
MWD can also explain its reasoning why it is exempt from the limitations of Prop 13. But just because the district “says it is so doesn’t mean it’s so.”
At the same time, MWD cannot sidestep the State legislature. It needs to send a mandatory notice to Mike McGuire, the President pro Tempore of the State Senate, and Robert Rivas, the Speaker of the Assembly, so that they and the Legislature are informed about this ten-year tax increase and determine whether it is our best interests.
It is time for this enterprise with over $13 billion in assets to open its books to the public and develop a forthright and continuing dialogue with the Ratepayers.
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Note: Our property tax bill has, in addition to the General Tax Levy (1% of Assessed Value), twelve other line items, four for voted indebtedness (includes MWD) and eight for direct assessments. These line items increase our tax bill by 25%. Pretty easy to bury the MWD tax.
(Jack Humphreville writes the LA Watchdog column for CityWatch, where he covers city finances, utilities, and accountability at City Hall. He is President of the DWP Advocacy Committee, serves as the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and is a longtime Neighborhood Council Budget Advocate. With a sharp focus on fiscal responsibility and transparency, Jack brings an informed and independent voice to Los Angeles civic affairs. He can be reached at [email protected].)
