Hi-Desert Water District approves FY27 budgets with 8% water rate hike and $3.4M capital plan

Hi-Desert Water District approves FY27 budgets with 8% water rate hike and $3.4M capital planThe California utility's board unanimously adopted its water and wastewater budgets for the upcoming fiscal year, securing funding for pipeline replacements and celebrating a distinct financial turnaround from previous deficits.

The board approved a water budget with $15.7 million in revenues and $13.6 million in operating expenses, generating a projected $2.1 million surplus.

Water consumption rates will increase by 8%, while wastewater rates will see a 9.75% hike effective July 1, 2026.

The $3.4 million water capital improvement budget is anchored by $2.49 million for replacing 53,500 feet of waterline.

The district's source water costs increased to $639 per acre-foot for the 2,900 acre-feet purchased for the year.

The district projects 175 new properties will tie into the sewer system in the coming fiscal year.

The Hi-Desert Water District Board of Directors unanimously approved the fiscal year 2026-2027 water and wastewater budgets on June 22, 2026, implementing planned rate increases to support capital improvements and maintain healthy financial reserves. Chief Financial Officer Tanya Gruwell presented the water budget, which projects $15.7 million in total revenues and $13.6 million in expenditures, resulting in a $2.1 million surplus excluding depreciation. The revenue projection relies on an 8% increase in water consumption rates, consistent with the utility's previous rate study. The district will advance a $3.4 million water capital improvement program next year. The primary capital expense is a $2.49 million allocation to the Capital Replacement Program for the installation of 53,500 feet of waterline. Operating expenses increased by $203,000 to $13.6 million, driven partly by a price hike from the Mojave Water Agency, bringing the cost of the district's 2,900 acre-feet of purchased water to $639 per acre-foot. The board also approved a $4.8 million wastewater budget against $4.5 million in expenditures, yielding a $288,000 surplus. To balance the fund, wastewater customers will see a 9.75% rate increase effective July 1, 2026. Gruwell noted that the district currently has 4,601 active sewer connections, having recently added 79 connections from a phase two expansion. An estimated 175 of the remaining 314 unconnected properties are projected to tie into the system in the coming fiscal year. Board members praised the financial projections, contrasting the current multimillion-dollar reserves with an earlier "doom and gloom" outlook during the district's last rate study. Directors attributed the financial stabilization to reducing administrative costs—including halving the engineering services budget from $500,000 to $250,000—and relying heavily on in-house staff to execute capital and operational tasks.