By Patricia Farris News Review Publisher –
At the Indian Wells Valley Water District public hearing on February 17th, the District approved the new rate structure by a vote of 4-1. Board Member, Stan Rajtora, was the one opposing vote. He had expressed concerns about the Finance Committee needing more time to review and approve a water sales & services manual and a problem with the fixed fee price to run the Water District.
The District has been working on a cost-of-service study and a new rate structure since last year. Previously, the structure was a 4-tier rate structure, with each tier charging more for water use.
Tier-1 was customers using under 900 cubic feet of water per month. Tier-2 was under 15 HCF per month, Tier-3 was under 21 HCF per month, and another water use was in Tier-4. The new rate structure will come into effect in March 2023.
With the new system, Tier-1 includes all customers using under 20 HCF per month. At the same time, anything beyond that moves a customer up into Tier-2. Users in both Tier-1 and Tier-2 are charged equally for the cost of running the water district. (@ a rate of $1.84 per HCF and for the cost of the Indian Wells Valley Ground Water Authority (IWVGA) pumping costs at a rate of $0.24 per HCF). The difference is that Tier-2 users will also be charged for the Ground Water Authority Replenishment Fee at a rate of $5.25 per HCF.
The Indian Wells Water District hired Hildebrand Consulting firm to advise on a study for the District’s cost of service and rate structure.
In a presentation, the firm stated that compared to the previous 4-Tier structure, the new 2-Tier structure will result in lower costs for the average water users but higher costs for heavy water users. The report also stated that they predict 73% of District customers will be in Tier-1, while 27% will be in Tier-2.
The Hildebrand presentation also noted that Tier-1 users might see lower costs this year. Still, costs for both tiers will increase in the years ahead to keep up with maintenance costs and upgrade the systems so that the District can provide water.
District member, Chuck Griffin, clarified that if a customer uses enough water to enter Tier-2, they will only pay Tier-2 rates on the water above the 20 HCF mark. If a customer uses 21 HCF per month, they will pay Tier-1 rates for the first 20 HCF of water and Tier-2 rates for the final HCF of water.
The consulting firm said that the 2-Tier structure was initially proposed to more accurately reflect the costs that drive the Water District’s costs. This is why the new system has Tier-2 users paying the Ground Water Authority Replenishment Fee, unlike the previous 4-Tier system, where the fee was spread across all Tiers. The Ground Water Authority is tasked with bringing what they refer to as the critically over-drafted water basin into sustainable use. The GA has allotted a certain amount of water per year to groups like the Water District but will charge a Replenishment Fee for any extraction beyond their allocation. The Replenishment Fee funds the GA to bring alternative water sources, such as imported water.
Griffin stated, “We do choose to have the nicer things. If we want a pool, we put a pool in. The District is charged because we are allocating more for those who want those things. I think it’s fair for us to pay a little extra to use it.” He also stated, “I am excited only to have two tiers instead of 4. I think it’s going to be beneficial to the District. I think it’s also going to be beneficial to the lower use Customers”.
Rajtora asked the Water District Staff if there is a system in place to help people find ways to reduce water or to figure out why they are using so much water. Don Zdba, acting General Manager for the District, recommended joining the Water Districts Water Smart Program. This program allows customers to track their water usage in real-time digitally and sends alerts if it detects a leak.
Board Member, Ron Kicinski, commented on the fixed fee for covering the District’s costs. He said that the District in years past tried to reduce the fixed fee and instead charged with a focus on a usage basis, but this resulted in layoffs and dwindling revenue reserves. He said “that people need to realize that we have a basic infrastructure to maintain whether anyone turns a facet on or not. It has to be there, ready to serve when people need water. To do that, it costs a certain amount of money”.