Recent Study Shows Mesa Water Is One Of Orange County’s Most Efficient Water Agencies
Study Uses Total Annual Water District Expenditures Per Capita To Measure Operational Efficiency
The Mesa Water District (Mesa Water) Board of Directors commissioned Raftelis Financial Consultants, Inc. (RFC) to Study the “true cost of water” and to develop a standard for measuring the operational efficiency of Orange County water agencies. RFC analyzed 10 Orange County water agencies’ 2010 revenues and expenditures, and compared each agency’s service area population.
RFC reported that water rate comparisons are an inferior indicator of operational efficiency due to water agencies’ differing revenue sources. For example, many Orange County water agencies -- but not Mesa Water -- receive substantial revenue from property tax, assessment fees or other fees paid by their ratepayers, which offsets water costs and subsidizes water rates.
Unlike most other Orange County water agencies, Mesa Water receives no property tax income; 94 percent of Mesa Water’s revenue comes from rates paid to the District by its customers. RFC’s Study further found that a water agency’s total annual per capita* expenditure is a better measure of operational efficiency. Mesa Water's total 2010 expenditure was $230 per capita in its service area, making it one of the most efficient water agencies in Orange County according to this measurement (see graph).
The Study concluded that, if water commodity rates make up a higher percentage of an agency’s revenues, then: 1) the rates better represent the “true cost of water,” and 2) the rates have a stronger impact on educating customers about water’s real value and may better promote customers’ water use efficiency.