Board approves 14 percent water rate increase
If customers of the Ramona Municipal Water District conserve more water, they will feel less impact of the 14 percent treated water rate increase approved by the board of directors at its Aug. 11 meeting.
That was a message conveyed by RMWD Chief Financial Officer Richard Hannasch during his presentation after the water rates public hearing that drew nearly 30 members of the public.
“Water rates is not the same as water billing,” he said, adding that the more a customer conserves, the lower the impact. “You are charged based on what you use.”
Ramona customers have been conserving, helping the district meet the 28 percent reduction mandated and reviewed by the State each month since June.
But, it’s a vicious circle. The more water customers conserve, the less revenue the district generates in water sales, its primary source of revenue, Hannasch said. That revenue is needed to maintain RMWD’s water infrastructure and 435 miles of pipeline, he said.
“If water consumption goes down, then water revenues goes down. That is just a mathematical reality,” said Hannasch.
The new rates go into effect Sept. 1 and include the energy cost to pump water 1,000 feet up the hill from the district’s Poway Pump Station.
The rates were approved by a 4-1 vote. Director Jim Hickle voted no.
Treated water will rise from $5.74 per unit to $6.54. One unit of water is about 748 gallons.
Untreated water will jump from $5.02 to $5.74 per unit.
For agricultural customers in the Special Agricultural Water Rate (SAWR) program, the rate will go from $5 to $6 per unit for treated water and from $4.28 to $5 for untreated.
The monthly system charge will increase nearly $4 per month for an average household, from $28.61 to $32.33.
Two members of the public spoke in protest of the rate increases while other customers submitted letters of protest.
Gaye Miller said she was worried about the pressure it will put on residents with limited income and wondered about the impact of pension costs on the district.
Resident Vince Guglielmetti said he looked at the budget and was surprised at the amount of some of the staff salaries, given the size of the district.
Guglielmetti asked how many protest letters had been received — a question later echoed by board president Darrell Beck.
District staff could not provide a number but said it received letters representing about 4 to 4-1/2 percent of the parcels, and noted it was not a majority.
Hannasch pointed out differences between the Ramona water district and other districts in the county. The district serves 9,500 accounts in a 75-square-mile service area, he said.
“This factor all by itself means the district’s water rates will always be higher than districts with smaller and more compact areas with greater density,” said Hannasch.
The district also uses a lot of energy to pump water up the hill and through the community, he said, and San Diego Gas & Electric costs increased $500,000 from 2013 to 2014 and is up 7.5 percent this year.
The single financial cost factor, Hannasch said, is the increase of water from the San Diego Water Authority, the district’s sole source of water. Since 2008, the cost of treated water from the water authority has risen 90 percent, said Hannasch.
“Some water districts have additional sources of water; we do not,” he said.
The water authority has said it will raise rates 6 percent for 2016.
Director Jim Hickle questioned how the district arrived at the 14 percent increase.
Hannasch said it was based on a study by Raftelis Financial Consultants Inc., which proposed two rate scenarios. The district chose the more conservative rate increase, he noted.
Hickle also said the fiscal year 2015-16 budget showed an 8 percent increase in water sales. Hannasch said that was the assumption when preparing the budget, before the recent decline in sales.
The board approved the approximately $37 million budget at the meeting. Hickle abstained from that vote.
In supporting the rate increase, Beck said the board has a responsibility to the ratepayers “to make sure we have proper funds to continue to have good clean drinking water.”
Director Thomas Ace said Ramona used to have the highest rates, but, without the pumping charge, its rates now fall in the middle among water districts. Ace said he believes the district has done a good job of absorbing costs and does not see any other viable solutions.