BILL SYSTEM TO DROP WATER RATES.

Byline: David Greenberg Staff Writer

Calleguas Municipal Water District customers will see lower rates when a new billing system is implemented, ending a six-year feud over funding the reserve account of the agency's water wholesaler.

The Metropolitan Water District is expected Dec. 12 to tentatively approve a new system in which Calleguas and 26 other member agencies would sign long-term contracts to purchase a specific amount of water each year.

Agencies currently buy water based on estimated demands, a method that often results in radical fluctuations in revenue to the MWD, which is carrying $4 billion in capital improvement project loans.

MWD, the nation's largest water wholesaler, has claimed that it needs its reserve fund - which currently totals $300 million - to maintain a high bond rating and to pay off debts during wet spells when water demand and revenues drop.

``There's been an area of friction there,'' Don Kendall, Calleguas' general manager, said Thursday. ``We feel the reserves are too high. A lot of the water districts want the money returned to them.

``If we go to contracts, we don't have to pour more money in there than we need to. We've been very vocal about that,'' he said.

He said halting reserve payments will save Calleguas about $800,000 a year, or about $4 to $7 a year to the average single-family home, which uses a half- to three-quarters of an acre-foot of water each year.

An acre-foot currently costs $500, but that rate will increase by $3 on Jan. 1 to absorb infrastructure repair costs, officials said. An acre-foot is roughly 326,000 gallons.

Kendall added that he will push for half of his agency's current reserve contribution, or about $5 million, to be returned.

Under the new system, Calleguas and its sister agencies would sign 10-year contracts with the MWD to change the annual allotment of water they want to purchase only after five years.

Ted Grandsen, who sits on the MWD board, said details still need to be ironed out regarding how outside agencies would be worked into the rate structure should they suddenly need to buy more water.

Although he said he expects tentative approval of the plan Dec. 12, he warned that reserve funds would not be reimbursed until after the system gains final approval next summer.

``We won't know exactly how much the contracts will be until that time,'' Grandsen said.

Calleguas' $64.8 million in annual revenue stems from selling 100,000 acre feet of water to about 600,000 Ventura County residents, including nearly everyone in Simi Valley, Thousand Oaks and Moorpark.