A bimonthly column written from SSWD General Manager Dan York on important issues and updates regarding various District matters.
As you may have read in the July billing insert or on the website, SSWD recently completed a Water Rate Study (Rate Study), which is a detailed review of the cost and the rates needed to support delivery of safe, high-quality and reliable water service.
The Board of Directors retained Raftelis Financial Consultants to conduct the Rate Study. They are an independent financial consulting firm with extensive experience working with utilities. Raftelis conducted an in-depth review of the District’s current revenues, operation and maintenance costs, capital investment plan and financial reserves during the study.
Raftelis determined that the District’s income and planned expenses are well balanced and managed and recommends a small rate increase of 3 to 5 percent in each of the next 5 years to primarily cover the costs of inflation.
At the Board’s direction, the Rate Study considered where we could reduce or delay expenses in order to avoid any rate increase at all. The Rate Study found that roughly $47 million of Capital Improvement Projects could be deferred over the next 10 years, which we will do, but that even with delaying these projects, the Rate Study found that operational costs would continue to increase at or slightly above the rate of inflation and that an increase in rates is warranted.
As the Board considers the Rate Study’s recommendations, we are continuing to work diligently to make sure our expenses are kept as low as possible while still delivering safe, reliable, high-quality water to our customers.
As part of the proposed rate increase, the Board is also recommending restructuring rates to make sure they are fairly distributed among customer categories (single family homes, apartments and duplexes, and commercial). Proposed changes include:
- For residential customers: An increase in the amount of water customers can use at Tier 1, the lowest rate/water use level, from 10 to 15 ccf. A ccf is 100 cubic feet of water and the common unit of measurement used in a water bill. It is equivalent to 748 gallons, so the increase would be from 7,480 gallons to 11,220 gallons.
- For multifamily customers (apartments and duplexes): In the past, multifamily customers have been included in the same rate category with commercial enterprises, such as restaurants, hair salons or retail outlets. Because water use for these types of customers can vary widely, the Board determined it would be more equitable to place multifamily customers into their own category. This change is expected to decrease rates for people who live in apartments, condos or duplexes.
- For non-residential accounts: The elimination of the off peak/on peak rate structure and implementation of a uniform rate structure. This would establish more equitable rates for this customer class and ensure that they still pay their proportionate share of costs.
The Board of Directors is now considering the recommendations found in the Rate Study and inviting your input.
I hope you will be able to attend the Public Hearing on Wednesday, October 16, 2019 so you can hear from the Board of Directors and we can hear from you about the proposed rate increases.
You can also learn more at our Open House on Tuesday, October 8, 2019 at 5:30 p.m., in the SSWD Boardroom at 3701 Marconi Avenue, Suite 100, Sacramento, CA 95821.
To see past General Manager's Corner articles see below: