At the August 6th board meeting the Marin Municipal Water District Board of Directors unanimously agreed to forego any rate increase this year or next by declaring a “Rate Increase Holiday.“ The rate increase holiday is possible due to improved financial conditions resulting from years of stringent budget control and increased water revenue that have led to improvements in both operating reserves and cash flow. The Board is also aware of issues with the current MMWD rate structure and is determined to bring forth a revised rate structure that is fair and equitable for all customers.
In June of this year the Board approved a two-year budget for fiscal years 2013/14 (FY14) and 2014/15 (FY15) that assumed rate increases at the level of the Consumer Price Index in both years. However, due to stringent budget and cost management and reduced spending by the District over the last several years, as well as higher water sales this spring, a rate increase is not needed at this time to balance the new biennial budget. The District is able to cover all operating costs, continue to invest in capital projects, and maintain adequate operating reserves without raising rates at this time.
The approved operating budget for FY14 is $75.5 million and the capital budget, including fire flow, is $22.8 million. The approved operating budget for FY15 is $77.2 million and the capital budget is $23.5 million.
“We had no choice but to raise rates over the last few years in order to recover from the 2008 recession,” said Board President Larry Russell. “But we worked hard to achieve our goal of stabilizing the District's finances. We are now in a position to give our customers a break, and that’s what we’re going to do.”
Like other water providers, MMWD saw a significant drop in water sales and revenues as a result of the 2008 recession, necessitating both budget cuts and rate increases. That experience also led the District to pursue an examination of its 10-year-old rate structure with two goals in mind: Secure a more consistent revenue stream to stabilize the budget and allocate costs fairly and equitably across all customer categories. Another long-term financial goal is to increase unrestricted/undesignated operating reserves.
A new Board committee, the Water Rate Restructure Committee, is currently in the process of reviewing and analyzing potential rate structure changes.
As an early step in the rate restructuring process, the District plans to conduct a round of public workshops this fall to explore the potential rate structure options with the residents of the 10 towns and cities and unincorporated communities in MMWD's service area.
MMWD is a public agency that provides high-quality drinking water to 185,000 people in a 147-square-mile area of south and central Marin. MMWD’s mission is to manage natural resources in a sustainable manner and to provide its customers with reliable, high-quality water at a reasonable price.