Posted on: September 27, 2016

CVWD further postpones increases in domestic water fixed rates

CVWD Board Room

Coachella Valley Water District’s (CVWD) Board of Directors today delayed the start date for increases to domestic water’s fixed rates and directed staff to develop a proposal with lower rates.

Following a public meeting on June 14, the board increased volumetric domestic rates and changed the way household budgets are calculated, effective July 1. The board also tentatively increased fixed rates at that meeting, to be effective October 1, but at lower levels than recommended by staff. The board asked to review those rates again before they were implemented.

At today’s meeting, staff presented updated fiscal data that showed expenses down from the previous projections. The board directed staff to use the updated data to determine an even lower fixed rate increase that will meet the district’s financial needs without collecting excessive revenue. These new rates will be presented to the board during a public meeting in October and, if approved, are tentatively scheduled to go into effect Nov 1.

“We know rate increases can be difficult, but they are sometimes necessary. It’s our job to make sure we are keeping increases as low as possible,” said CVWD Board President John Powell.

The recommended rate changes were based on a comprehensive Cost of Service Study that included several assumptions about anticipated revenue and expenses. Increases were proposed due to reduced revenue from state-mandated conservation and expenses related to the largest capital improvement project in CVWD’s history as it responds to California’s new drinking water standard for chromium-6.

The most cost-effective solution for removing chromium-6 from drinking water is expected to cost about $250 million in capital expenses, plus ongoing operation and maintenance costs. Also, additional capital improvements are needed to maintain and improve the domestic water delivery system to ensure it can meet the drinking water and other daily use needs of about 318,000 residents.

Fixed rate increases are meant to provide for greater revenue stability. The Cost of Service Study determined that different fixed rates should be established for different types of customers to reflect the true cost of service.

The Coachella Valley Water District is a public agency governed by a five-member board of directors. The district provides domestic and irrigation water, agricultural drainage, wastewater treatment and reclamation services, regional storm water protection, groundwater management and water conservation. It serves approximately 108,000 residential and business customers across 1,000 square miles, located primarily in Riverside County, but also in portions of Imperial and San Diego counties.

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