Water Board Balances Budget with Unsigned, Controversial Water Trafficking Deal
An Election Year Ploy to Stall Raising Rates?

The Water Board balanced the 2011-12 Budget with $191,000 of revenue and cost sharing from the unsigned, controversial water trafficking (called "wheeling") agreement with Rowland Water District. Without the Trafficking Deal, the LHH Water District would been $84,000 in the red. That would be the second year of deficit, following the 2010-11 projected $89,000 of red ink.

Actual 2011-12 Budget Excerpts

Should revenue from an unsigned deal and unlikely to generate income until late in the fiscal year, be included in the budget without qualification?

Multiple years of operating deficits raise the question of whether costs should be cut or rates raised.

Board candidates for re-election Wilson and McVicar have touted not raising rates in election statements.
Deficits are financed by reducing reserves. The District's reserves were established by previous Water Water Boards operating the District in a manner in which Budget surpluses occurred.

The Water Board is the only elected body in the City that is paid. In a September 15, 2011 article, Board Member and Candidate Pam McVicar said, "She feels the board members need to be paid if they want to be taken seriously by other water companies. The board has not wanted to be the only volunteer board in the state."

After receiving a letter from Rowland Water District dated September 1, which all but called the deal dead, the La Habra Heights Water Board held a special meeting on September 13 in which they unanimously voted to leave out protective indemnity and damages language from the draft Agreement which Rowland objected to, trying to resuscitate the moribund deal.

The tables appear to have turned from when Rowland Water District first proposed the deal in late 2010 when they were anxious to complete the deal quickly to get alternative water ahead of plant maintenance which would cut off part of their water supply. Now Rowland Water District is in the driver's seat as the LHH Board needs the money to cover the budget deficit and prevent an election year rate increase or having to cut Directors' pay and travel, or other District expenditures.

See 2011-12 Water District Budget

Related Stories:

Wheeling and Dealing on the Water Board

La Habra Heights Water District Explores Water Trafficking Deal with Rowland Heights - Story

(2009) Water District Board Wines and Dines at Your Expense

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