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• The establishment of a new bi-monthly watershed management fee based on meter size for all customers. This new fee covers a portion of watershed maintenance and operational costs;
• Adjustments to the tier rates (per-CCF*) based on consumption. The tier rates cover the cost of water transmission, treatment, distribution, watershed maintenance, importing water, and recycling water;Tier breaks: •The tier breaks for single-family residential customers remain the same; •The tier breaks for duplex and multi-family residential customers change; •The tier breaks for all other customer categories (single-family irrigation, commercial, irrigation, institutional, recycled water, and raw water) remain the same.
This is MMWD's first rate increase since May 2012.
An additional 4% increase across all water service rates, fees, and charges went into effect May 1, 2016 and is reflected in water bills issued on or after July 1, 2016.
*One CCF, or hundred cubic feet, is 748 gallons.
For the majority (79%) of single-family residential customers, the current fixed service charge will increase approximately $5 per month and the new watershed management fee will be an additional $5 per month, so most customers will see their bimonthly bills increase by approximately $20. The overall impact of the rate change on customers’ bills will vary because MMWD’s costs to provide water at each tier level vary.
The new rate structure meets California law, as defined by Proposition 218, requiring rates to reflect the actual cost of providing service to various customer classes. It also follows industry best practices for rate-setting standards.
There were different drivers in this COSA than in the last one, i.e., improving revenue stability in the face of reduced water sales. In the last rate study, the district’s income stream was focused on recovering revenue from the commodity charge, i.e., the tiered rates. That approach led to much more volatility due to reductions in demand from economic down turns, climate impacts, and drought effects. MMWD last completed a COSA in 2010.
Low water use customers will have lower bills than high water use customers because low water use customers will be in Tier 1 and charged the lowest per-unit cost. Since more revenue will come from the fixed service charges, the amount of revenue that must be generated by the tiered portion of the water bill is reduced. Therefore, the tiered rates did not change uniformly.
As with any business, the district has to remain a competitive employer. We have hired more than 20% of our workforce within the last five years. Our competitors for qualified employees include other water districts, large industrial employers, and the high-tech industry.
In terms of pension costs, as of January 2013, all public employees in California are under a new pension plan under the Public Employee Pension Reform Act (PEPRA). MMWD already has 15% of its workforce under PEPRA and that percentage will grow over time. In addition, every year, a portion of MMWD’s contribution to the pension plan goes to paying down the unfunded liability.