Rate Increase FAQ
What is happening and why?
SLVWD needs to increase its revenue to pay its bills, but as a publicly controlled local service provider, it cannot arbitrarily increase its rates. Proposition 218 requires organizations like SLVWD to base their rates on the actual cost of service and to explicitly promote public participation in the rate-setting process. The two key steps in this process are: (1) determining revenue requirements, and (2) designing a corresponding rate structure. Proposition 218 also allows a Board-recommended rate increase to be rejected if it is formally opposed by more than half the ratepayers.
To conform with Proposition 218, it is standard practice for water districts to hire an outside firm with special expertise to perform a rate study; this was last done in 2017, and a new rate study is typically performed every five years or so. SLVWD chose the consulting firm Raftelis, which began work in the summer of 2023. Raftelis presented the results of their study at multiple meetings of the Budget and Finance Committee and the Board of Directors in the Fall. Public input and guidance from the Board resulted in a final recommendation for a proposed rate structure which the Board approved by a 4-1 vote on December 7th.
The new rate structure is designed to meet SLVWD’s anticipated revenue requirements for the next five years. It does this using a new tiered-rate system intended to minimize the negative impacts on low- and moderate-use residential customers. The impact will be felt most dramatically by residential customers who use a lot of water outdoors.
SLVWD will host a public workshop from 10:00 AM to noon on Saturday January 20th at Highlands Park Senior Center, 8500 Hwy 9, Ben Lomond to promote a constructive public dialogue surrounding the proposed rate structure. A final public hearing will be held on February 15th, and the new rate structure, if approved, will take effect on March 1, 2024.
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